The Government is running the "huge risk" of oversimplifying the way schools are funded, leading to the creation of a new set of inequalities across the system, heads' leaders have warned.
Earlier this week, education secretary Michael Gove launched a new consultation to radically reform school funding in an attempt to deal with disparities that have led to similar schools being funded at different levels.
The move could see the number of criteria by which schools are funded being dramatically reduced from the dozens that currently exist to just four or five.
Speaking in the Commons on Tuesday, Mr Gove said the new system would be "more consistent, simpler and more transparent".
But the Association of School and College Leaders (ASCL) said that while it backed the move to reduce the differences in funding between schools in similar circumstances, it warned ministers there was a danger of replacing one inefficient system with another.
ASCL policy director Malcolm Trobe told The TES: "The Department (for Education) is running a huge risk of oversimplifying the funding formula. In the search for creating a simple solution, the risk is they make it too simplistic and create a new set of inequalities."
Mr Trobe called for a more intelligent funding system that would not limit what pupils are able to study simply because of the school they attend.
"Small rural secondary schools may not be able to offer the full breadth of curriculum as larger schools in semi-rural or semi-urban areas. There needs to be a more sophisticated system, which delivers the same level of opportunity whether you are at a big school or a small school," he added.
This week's consultation is the second launched this year by Mr Gove, who back in April called for guidance on how to deal with funding disparities, which could see two similar primary schools' funding differ by as much as pound;1.3 million and secondary schools' funding by as much as pound;1.8 million.
The consultation issued on Tuesday gives more details on how the DfE proposes redistributing school funding across the system.
Russell Hobby, general secretary of heads' union the NAHT, said it was a step in the right direction but echoed the ASCL's concerns about oversimplification.
"There is always that danger with this Government that in trying to reduce bureaucracy it becomes too simplistic," Mr Hobby said.
"The Government is limiting the number of factors local authorities can use to devise their formula, which is something people need to respond to (in the consultation).
"But just being able to understand the funding formula is the right direction of travel," he added.
The F40, a group of local authorities campaigning for fairer school funding, said it was "cautious" about the consultation.
Gillian Hayward, the F40's vice-chair, said: "We are pleased our cause has been heard. But we are concerned about the speed of delivery. It could take years to happen."
PFI: SCHOOL BUILDS
Education secretary Michael Gove also announced a new pound;2 billion programme to build between 100 and 300 schools under a new private finance initiative.
Although widely expected, it comes despite chancellor George Osborne dismissing the funding method as "totally discredited" while in opposition.
Mr Gove pledged another pound;500 million of capital to areas with the greatest strain on the number of school places.
The two funding packages followed a further announcement of a consultation on school capital funding following the publication of the James review. The consultation will look at how best to allocate and prioritise cash for school building.
Original headline: `Huge risk' funding changes may spark new inequalities