It has given councils until next Friday to come up with plans for cutting classes of more than 30 children by 2000. A statutory maximum class size of 30 comes into effect in September 2001 but the Government expects virtually all schools in England to have complied with the limit a year earlier.
Councils have been told they can get round accommodation problems by using mobile classrooms, but that it will not be acceptable to achieve classes of 30 or fewer by forcing more parents to accept places in less popular schools.
Following the Comprehensive Spending Review, ministers have set aside Pounds 620 million to support the policy until 2002 - more than originally expected.
So far 65 councils have been given Pounds 62 million for extra staff and accommodation, and 1,527 extra teachers have been recruited.
David Blunkett, the Education Secretary, says there are now 140, 000 fewer five, six and seven-year-olds in classes of more than 30 than there were at the beginning of this year. This exceeds by more than 11,000 local authority projections of what could be achieved by January 1999.
But an analysis by The TES of how the cash is being spent reveals huge contrasts in what the Government is getting for its money.
In Wakefield, West Yorkshire, just 100 pupils have been taken out of classes of 30-plus at a cost of Pounds 600 each. By contrast, East Sussex, which was given Pounds 116, 000, has managed to take 2,000 pupils out of large infant classes - a cost of Pounds 58 each, the lowest across the 65 authorities. The average amount of money spent in each local authority per child on reducing class size was Pounds 171.
The 1,527 teachers recruited are not full-time equivalents. They are a mixture of newly-qualified and experienced teachers. Some, however are not trained in key stage 1, the job they have been taken on to do.
Numbers of primary-age children peaked this year and will now start to decline making it easier for the Government to meet its pledge.
But analyst John Howson, from Education Data Surveys, said there could be problems of bigger classes at key stage 2 and in secondary schools.