Official figures reveal that thousands of schools are still struggling with out-of-date facilities, despite the Prime Minister's promise in 2000.
Only pound;8.5m of the pound;750m has been spent on a handful of projects due to red-tape and what key figures refer to as in-fighting between Sport England and the lottery-backed New Opportunities Fund which has responsibility for the initiative. More than two-thirds of the budget has not yet even been allocated.
The revelation comes at a sensitive time for ministers as they throw their weight behind London's bid for the 2012 Olympics and people are enthused by England's rugby World Cup triumph.
Further evidence of dissatisfaction with the Government's record on school sport came this week from Trevor Brooking, the Football Association's director of development. Mr Brooking, an ex-England footballer, who in his former role as chair of Sport England backed Mr Blair's announcement, said this week: "Schools now play sport once a week. By the time they go to next week's lesson, they are just getting up to the level they were at the previous week, so they are never going to improve.
"But school is the obvious place for sport. We are expecting a health survey in a few weeks, and I am certain it will be damning."
International statistics show that the UK is one of the fattest countries in Europe. One in 10 of the country's six-year-olds and one in six 15-year-olds is obese and the rate is rising faster than anywhere else in the developed world.
Announcing the pound;750m funding at Labour's 2000 conference, Mr Blair declared: "This is not just a sports policy. It is a health policy, an education policy, an anti-crime policy, an anti-drugs policy."
The Government insists that the "majority" of projects will have been completed by 2006. It also points to an additional pound;459m for school sport promised in the 2002 spending review.
But the revelation that the cash has not been spent is the latest in a series of embarrassments for the Government on an issue which it sees as one of its success stories. Despite promises to increase to 75 per cent the proportion of pupils doing two hours of PE and after-school sport, only half do so. Children in France and Germany have an average of three hours PE each week.
Lord Moynihan, shadow sports minister, who received the figures in answer to a parliamentary question, said: "The Government needs to explain why these unacceptable delays have taken place.
"When you look behind the headlines the Government is not delivering school sports facilities."
Darren Campbell, Britain's 200m Olympic silver medalist, called on the Government to honour its promises. "It is extremely important that this money gets put into school sport. A child's experience of sport at school shapes their future participation."
A Department for Education and Skills spokeswoman said: "Building top quality facilities that benefit as many schools as possible requires proper planning and consultation. We expect the vast majority of projects to have been completed by 2006. That is when you should judge the results."