Local authorities are to be given significantly greater powers over deciding where new free schools and academies should open, under plans being considered by the government.
Councils with the most pressure on school places will be asked to bid for the #163;1 billion in funding that was announced by Chancellor George Osborne (pictured below) in his Autumn Statement in December.
But proposals to give local authorities a central role in deciding where that money goes represent a major departure from the original free school policy, which enabled parents, teachers and charities to set up a new school in their area in direct negotiation with the Department for Education.
According to officials, the majority of free school bids will still be made directly to the DfE, but the new policy reveals the strain being placed on the department to meet the need for additional school places.
The #163;1 billion is expected to fund around 50,000 extra school places through the creation of 100 new free schools and academies and the expansion of existing good schools.
England is anticipating an 8 per cent increase in pupil numbers - about 270,000 more children - over the next three years.
Under the scheme, known as the Targeted Basic Need Programme, local authorities will identify sites where they believe a new school is most needed and invite free schools and academies to compete for the plot. They will then choose the winner.
As with all free schools and academies, education secretary Michael Gove would sign off on the funding agreement and have the final say on any new school, but officials hope the changes will increase local government support for the academy and free school movement.
One of the major barriers to the free school programme has been a chronic lack of suitable sites, and it is hoped these proposals will circumvent that problem.
A government source said: "When in government, Labour cut funding for school places, ignored warnings about the looming shortage and even told councils to scrap surplus places.
"This government is taking action to clear up Labour's mess. Funding for school places has more than doubled, and through policies such as the Targeted Basic Need Programme and the existing free schools programme, new schools will be opened in the areas that need them most."