The Teacher Training Agency has warned universities and colleges that the amount of money they spend on student teachers must be linked to the quality of their courses.
The agency last week announced that the consultancy Coopers and Lybrand has been asked to review funding arrangements.
TTA chief executive Anthea Millett said: "It is time to move away from the current method of funding and allocating teacher-training places which bears no relation to the quality of the training.
"Low-quality training means low-quality teachers and that means short-changed and under-achieving pupils. If we are to get the high-quality teachers we need we must use all our muscle to drive up the quality of the training provided. "
Funding is currently tangled up with general university finances. These have been traditionally managed in a highly independent fashion and the systems of university cross-subsidy make it hard to know exactly what is being spent.
The determination to launch a funding review was signalled earlier this year by the TTA chairman, Geoffrey Parker, who described disparities in funding as "indefensible". (In general, older universities receive more money per student than former polytechnics.) The agency is also about to launch a consultation exercise on the future of continuing professional development - including in-service training. This will start with a survey of schools, education authorities and training institutions.
Writing in this week's TES, Anthea Millett said that Pounds 400-Pounds 500 million is spent annually on in-service training: "However, we have very little indication of how these resources are being spent."
In a letter formally announcing the initiative to Gillian Shephard, the Education Secretary, Geoffrey Parker writes that "current strategies do not always ensure that the right teachers are given training by the best trainers. "