RADICAL plans for schools to receive cash directly from Whitehall were unveiled this week.
The Secondary Heads Association is calling for a funding shake-up to eradicate the huge differences in school budgets across the country.
It says budgets should be founded on children's needs in order to give teachers across Britain the same chance of meeting national targets.
The SHA formula would take socio-economic circumstances into account. Schools would receive funds directly from central government. Meanwhile, councils would continue to look after special needs, allocate places and handle admissions, structural buildings maintenance and auditing the schools' budget.
Councils would be allowed to raise cash through the council tax for "enhancement projects" such as school music.
SHA has campaigned for several years for an overhaul of school funding but says the pressure to raise standards and meet national targets has made the issue more pressing.
It says it is unacceptable that schools with a wide variation in class sizes and pupil-teacher ratios should be expected to hit the same targets.
Richard Fawcett, SHA vice-president, said: "The final straw is the Government's intention to pay some teachers more for passing through a threshold based on their performance. There are to be nationally monitored criteria and yet teachers do not have fair and equitable access to the tools to do the job properly."
The Departent for Education and Employment and Downing Street have shied away from school funding reform, lest it create losers as well as winners.
SHA described the present system as arcane and unfathomable and added that a DFEE official had even admitted that "a little obfuscation assists the political process".
The Department for the Environment, Transport and the Regions is now reviewing local government funding and a Green Paper is expected in the summer. As education accounts for around 50 per cent of council budgets, this could have major implications for schools.
SHA's proposals for a national funding entitlement feature in a report Fairer Funding written by Peter Downes, a former president and now consultant to the union.
They follow the union's 1994 report A Better Cake on school funding which was well received but never acted upon.
Mr Downes said: "We simply cannot tolerate the inequities of the present system any longer. People are under national pressure to do the same job with different tools. We understand that there are now signs within government that the present position is indefensible. Everyone now knows that the present system has winners and losers and this can no longer be tolerated."
The Local Government Association said it did not support proposals for a national funding formula as it believed the needs of schools were different around the country and within local authorities.
It said funding needed to be channelled through councils, as they were aware of local needs.