Schools should be forced to hand money set aside for maintenance and ICT equipment to their local authority, a government-commissioned report has recommended.
Heads currently control their own small capital allowance, the Devolved Formula Capital Grant, which they can spend on small building projects or ICT equipment.
Earlier this year, The TES revealed the Department for Education had slashed the capital grant by 80 per cent, leaving schools facing a #163;500 million black hole in their budgets.
But a major report on school building costs released last week called for the remaining cash to be handed over to the LA or academy chain responsible for the school.
The recommendation has been blasted by heads' leaders, who say it contradicts the Government's policy of handing more autonomy to schools and cutting red tape.
Malcolm Trobe, policy director of the Association of School and College Leaders, said the changes would force heads to "go cap in hand" to their authority if they needed even the smallest piece of work done.
"The money schools receive has already been decimated, but to remove the money completely will cause significant outcry," he said. "It may not be a huge amount of money now, but it removes any flexibility a head had. If the Government accepts the recommendation, it will simply create a more bureaucratic system."
The Review of Educational Capital by Sebastian James, director of electrical store chain Dixons Retail, says single academy trusts or small voluntary aided (VA) schools should keep hold of the money, but in other cases it should be taken away.
"We believe that while there is a case for each school having a modest annual amount of its own capital ... it should be aggregated to the level of the responsible body wherever possible," the report says.
"The responsible body in question, for example, an academy chain, local authority, or large VA organisation, would hold the funding for all of the educational facilities they represent, and agree priorities for investment with them. The (body) can then allocate it, as they see fit, to the most urgent needs of their estate."
The report focused on the Labour government's #163;55 billion Building Schools for the Future programme, which was axed by education secretary Michael Gove last summer.
The review said more than a third of the programme's budget was wasted. Over #163;8 billion was spent on the scheme and the report says some #163;2.6 billion could have been saved.
The document calls for new schools to be built from template designs and that flatpack classrooms could be built offsite.
The DfE has yet to respond to the report, but Mr Gove welcomed its findings last week.