Under the new proposals, schools will be able to choose to receive 100% of their budgets and make decisions on where to buy services.

According to one estimate, the move could put an extra £600m a year into school budgets when it comes into force in April 1999.

Education Minister Stephen Byers: "We are treating all schools fairly"

At present, local education authorities in England retain a proportion of school budgets - anywhere from five to 15% - to pay for services such as school meals, minor repairs and curriculum support materials. Many schools complain that the amount held back is wholly unrealistic.

Headteachers, particularly those in charge of large secondary schools, are likely to welcome the chance to shop around. The money saved could then be used to employ more teachers or buy new equipment.

The Schools Standards Minister, Stephen Byers, confirmed the government's intention during his speech at the conference in Eastbourne.

"This is schools' money and schools should have the benefit of that money, and control how that money is used," he said.

He also proposed special arrangements for school music lessons, the subject of heavy cuts in recent years, which will be funded to a minimum level by central government from next April.

Freedom

The proposals will give local education authority schools in England the same financial freedoms as those currently enjoyed by grant maintained schools, which claim to have saved thousands of pounds by finding cheaper alternative suppliers.

Schools could find they have more money to spend on pupils

They will also reduce the spending power of local authorities, in line with the government's stated intention that they should take on more of an advisory role in education.

Mr Byers said authorities would retain control of spending decisions in clearly defined strategic areas such as school transport and special educational needs.

Graham Lane: "Clarifies roles of local government and schools"

"District auditors will check that that has been done properly. There will be no question of LEAs [local education authorities] being able to exploit the new system to withhold money from schools," he added.

The proposals were applauded by conference delegates, who have spent much of the week attacking government policy on issues such as targets for literacy and numeracy.

Struggle

The general secretary of the National Association of Head Teachers, David Hart, welcomed the announcement as a step in the right direction but warned it could cause redundancies at town halls up and down the country.

David Wilcox, vice chair of education with the Local Government Association said he hoped the best local education authorities would be able to persuade their schools to "buy back" their services.

"Local education authorities which may struggle are those which are not providing efficient services, and there are some of those," he said.

The proposals represented a considerable extension of central government control, he added.

"Increasingly, we are becoming agents of Whitehall in the localities, and that is a regrettable trend."

The former Conservative Education Secretary, Gillian Shephard, said: "They have effectively adopted Conservative plans to give all schools more autonomy. This is virtually what we were proposing before the election.