After fears that inner London schools could lose up to £200m in funds for 'additional educational needs', the Deputy Prime Minister, John Prescott, promised that no authority will receive less next year than this.

Mr Prescott announced in the House of Commons that education authorities would receive an extra £1.4bn - an increase of 7.2% - but there would be further consultation before changes to the targeting of funds towards areas of particular need.

John Prescott will consult further before making changes

The present system for measuring extra educational need will remain in place for the next three years, despite complaints from authorities in the north of England and the shire counties that they are disadvantaged.

At present, the formula for calculating how much each local education authority receives from central government - the standard spending assessment - means that spending on pupils in inner London is 40% above the national average.

For example, spending for 1998-99 shows £3,327 for each primary school pupil in the London Borough of Hackney, compared to £2,097 in Wakefield. The provisional figures for next year show the per pupil spending in Hackney rising to £3,480 and £2,201 in Wakefield.

This reflects the method used to determine additional educational needs, which favours local authorities with the highest numbers of pupils from ethnic minorities, pupils from single-parent families and families living on benefit.

Headteacher Mary Marsh says London schools need the extra

The headteacher of a west London comprehensive, Holland Park School, Mary Marsh, says that the extra funding is necessary to face the "huge challenges" of teaching in inner London, including the problems in recruiting staff.

In her school, two-thirds of pupils have English as a second language, there are 100 nationalities and 70 languages, with particular problems facing refugees and children from very deprived backgrounds.

But a shift to measuring deprivation in terms of low educational achievement and factors such as low average birth weights would result in a less favourable settlement for education in London.

Mr Prescott told the House of Commons that there were a number of options for allocating extra funds for local education authorities, but no consensus had emerged.

Among the organisations to be consulted by Mr Prescott will be the Local Government Association.

A working party from the association has been considering its own approach to calculating additional educational need, but without reaching any definite conclusion. Its 'shortlist' of factors that might be taken into account, in addition to the present criteria, include health, housing problems, large families, low birth weights and pupils with English as an additional language.