The education minister said there are 85,000 empty school desks across Northern Ireland, on 13 December 2011.
John O'Dowd was addressing an adjournment debate brought by the UUP's Michael McGimpsey on the amalgamation of three inner South Belfast primary schools.
Mr O'Dowd said proposals to bring Blythefield, Donegall Road and Fane Street primary schools together in one building were at the early stages and had to be put in context with the length of time that schools can wait for new buildings.
He said that although the three schools had 1,324 available places, only 407 pupils attended.
The minister said he had listened carefully to members and was aware of the issue but was unable to make "a definitive decision on the project". He advised a short-term solution was necessary until a decision was made.
Mr McGimpsey said the amalgamation would require a 14-class building and one and a half hectares of land.
He said a site at Belfast City Hospital had been identified as an option for the relocation and had the local support of the community.
Mr McGimpsey said the planning service advised in April 2010 that a full planning application costing £16,000 was required.
Due to the cost, the Belfast Education and Library Board has not progressed with the application, he said.
He urged Education Minister John O'Dowd to get permission from the board to "approve the viability" of the project, suggesting it would save money in the long term.
Anna Lo, the Alliance party's MLA in South Belfast said the process which started seven years ago has been "totally unacceptable" and had experienced a series "protracted delays".