Leighton Andrews, the Assembly education minister, has challenged the schools sector to find substantial savings and channel more cash to the front line as part of a wide-ranging review of spending.
Mr Andrews has written to schools, teaching unions, local authorities and bodies, including Estyn and the General Teaching Council for Wales, giving them until the end of September to come up with suggestions.
In May, auditors PricewaterhouseCoopers published the first phase of the spending review, revealing that almost a third of Wales' annual pound;4.5 billion education budget fails to reach the classroom. Just pound;1.8 billion goes directly to schools to spend on teaching and learning.
The report suggested ways to make savings, including setting regional consortia to run schools, and merging education administration on a regional basis.
Mr Andrews said: "We require a step change to take these suggestions forward with purpose and urgency, with all organisations involved in the delivery of education having a crucial part to play."
Mr Andrews said he had received a "great deal" of helpful feedback and suggestions, much of it pointing out work that is already taking place, and a "clear message" that people are ready to respond to the report.
"I have made it clear that I want to ensure more funding reaches the education front line - our schools, colleges and universities," he said.
The next phase of the exercise, now called the front line resources review, will focus on implementation.
Chris Llewelyn, director of education at the Welsh Local Government Association, said local authorities would welcome the chance to respond.
"There was nothing in the report that local government cannot accept or cannot embrace, and in many instances these things are being done already," he said.
"For example, a surprising amount of collaborative work is already taking place and has been for some time.
"The pace and scope of that work has picked up in recent years and there is commitment to take it forward.
"Nevertheless, there's always room for improvement. With public spending cuts looming there's an incentive for everybody to squeeze as much out of the existing funding as they can."
However, teaching union the NASUWT Cymru warned local authorities against "passporting" more money to schools.
Chris Keates, the union's general secretary, said: "While no one will argue that schools in Wales need to be better funded, there is the very real danger that local authorities will be tempted to increase money to schools in order to appease the minister.
"This could lead to cuts in essential central services depriving children and young people across the authority of specialist support."