Jean Else in happier times - she has turned around her school
A prominent head teacher has threatened on live television to resign over the school funding issue.
Jean Else, head of Whalley Range High School for Girls in Manchester - made a dame two years ago for her services to education - said the future success of the school was at risk.
She said she was having to cope with a £600,000 shortfall in her budget this year.
Dame Jean told GMTV that "sadly" she would have to resign if the money could not be found.
The government has acknowledged that some £500m is "missing" but puts the blame on local education authorities.
It has promised a full statement on the matter this Friday - the day after the local elections.
Dame Jean said: "I am faced with having to lose some of my incredibly valuable staff and cut aspects of the curriculum and I really feel it will defeat the object and I am not prepared to do that."
She has worked over the past nine years to turn the school from a place that was officially judged to be failing into a popular and successful establishment.
Her efforts have been praised by government ministers.
She said: "Obviously, I love this job. I wouldn't be doing it if I didn't. I have a tremendous staff and it's a vibrant place and the kids are brilliant."
But she would rather "pack it in" than see the school suffer.
The former education secretary Estelle Morris was a pupil at the school until 1970 and is still a visitor.
Mr Blair promised that more money was being put into schools
On Monday the Prime Minister, Tony Blair, promised an explanation for the funding problems facing schools.
Speaking to reporters at Downing Street, he said that the Education Secretary Charles Clarke would make a statement on Friday about the growing complaints about school funding problems.
"We need to find out exactly where this money is tied up, but there was a 10% increase that has gone into schools this year," said Mr Blair.
Head teachers have warned that budget shortfalls could lead to staff redundancies - but Mr Blair asserted that extra money was being put into schools.
"You can't have a situation where we're putting this amount of money into schools and the money isn't reaching the schools," he said.
The government has claimed that £500m funding intended for schools has failed to be passed on by local authorities, and the prime minister said that there would be a complete analysis of this "unallocated" money.
But this was attacked as "unbelievable complacency" by the Shadow Education Secretary, Damian Green.
Mr Green said that the government was either "trying to pass the buck unfairly, or they have been incompetent" in the changes to the school funding system.
The Conservatives also highlighted the comments about school spending cuts by Downing Street special adviser, Fiona Millar, who is the partner of Downing Street director of communications Alastair Campbell.
Writing in her capacity as a primary school chair of governors, Ms Millar told parents of concerns over pressures on funding this year, which could threaten staffing levels.
The Liberal Democrats have said that the education secretary should "declare his hand now" and that information about school funding should be made available now - rather than waiting until the end of the week.
"Waiting until after the local elections to reveal his information makes you wonder what the education secretary might be hiding. This will not fill voters, parents or pupils with confidence," said the Liberal Democrats' education spokesperson, Phil Willis.
The question of school funding has been raised repeatedly during the annual round of teachers' conferences - with claims that a number of schools and authorities are facing serious budget difficulties, which could lead to teachers being made redundant.