Individual schools are spending as much as pound;250,000 on photocopiers because of bad business management, a senior schools procurement civil servant admitted last week.

Claire Dicks, assistant director of the educational procurement centre at the Department for Children, Schools and Families, said schools are getting tied into rolling contracts with companies that can end up spiralling out of control.

The news is likely to turn faces red within the Department, particularly that of Schools Secretary Ed Balls, who has called on schools, colleges and children’s centres to make savings of pound;650 million in their procurement budgets.

Speaking at a Local Government Chronicle conference on value for money last week, Ms Dicks said schools can become tied into leased contracts that can last up to 10 years.

“There have been cases where schools get caught in rollover leases - one school we dealt with was spending pound;250,000 on three multi-functional devices (photocopiers),” she said. “People should be wary of rollover leases because huge costs can be incurred.

“It can happen when school business managers change jobs and the knowledge is not transferred to the new person taking up the role. That person basically re-signs a contract, so they end up putting interest on interest. They can end up paying for five or 10 years and cannot get the costs to come down because the interest is so high.”

In September last year, a leaked report by former WHSmith chief executive Richard Handover laid bare the full extent of money being wasted in schools.

Mr Balls had commissioned the report to pinpoint areas where schools could save money, but was forced to distance himself from the findings after the BBC said schools were wasting millions.

The Handover report said one primary school had spent pound;50,000 on installing three toilets - five times the proposed sum - while another school spent pound;30,000 on a photocopier.

It led to Mr Handover claiming that headteachers had “no concept of the value of money”.

Mick Brookes, general secretary of heads’ union the NAHT, said his union was “very concerned” about the growing responsibilities that heads are now expected to take on.

“This just shows that we need to get school business directors and school business managers in place to take away from heads these types of tasks,” he said. “This is not what heads should be doing. What they should be doing is leading teaching and learning. They are not businessmen.”