The policy document to be launched today by Tony Blair, the Labour leader, and David Blunkett, his education spokesman, reveals a U-turn on what has been the most sensitive policy issue within the party since the row over Mr Blair's decision to send his son to the London Oratory, a grant maintained school.
A full draft of the proposals, leaked to the Independent, reveals that the 1,000 GM schools, along with the 15 once bitterly controversial city technology colleges, will have the right to continue in a new category of foundation schools.
Under Labour's plans there would also be more autonomy for local authority schools. But Labour intends to give councils responsibility for distributing their funds, two representatives on each of their governing bodies and the right to approve their admission procedures. Disputes between the schools and the local education authorities over admissions policy will be referred to independent arbitration "unlike the current concentration of power in the hands of the secretary of state alone".
The plans bury once and for all the party's outright opposition to GM schools. All schools will be expected to manage a minimum of 90 per cent of their budget - instead of 85 per cent as at present. And for the first time there would be more parents than local authority members on the governing bodies of all state schools.
The party will introduce two other new categories of state school to replace the existing ones. Beside the new foundation schools, which will "hold their own assets, employ their own staff and retain charitable status", community schools will replace the current category of 14,000 county schools, while voluntary aided - mainly church - schools will be replaced by a new category of aided schools.
The document, Diversity and Excellence, a New Partnership for Schools, argues that "the whole notion of LEA control of schools" which created the drive for grant maintained education is now "history". It adds: "LEAs do not control schools. Schools do. LEAs provide the local democratic framework and need to become agencies and advocates for improving standards in all schools."
The number of parents on typical school governing bodies will increase from three to four, while for the first time at least one statutory parents' representative will sit on each local education committee.
GM schools would be funded through local authorities with 90 per discretion over their budgets and Labour would "immediately" end the "inequity" which led to special incentive grants for the GM schools.
Other points include:
t No reintroduction of the 11-plus, but existing grammar schools to change only with local agreement. While grammar schools would be encouraged to drop exclusion by examination, such a change would only follow "a clear demonstration of support from the parents affected by the decision".
t Statutory duty on local authorities to remove surplus places with a local public inquiry in case of disagreement: "There must be a sensible local partnership to plan school places."
t Local authorities to draw up strategic development plans on raising standards in conjunction with local educational "networks" involving business, colleges, parents' organisations and governors.
t Governors to choose from the three types of school with a parents' ballot when changing from one status to another.
The paper warns schools not to vote for grant maintained status before the next election.
In a speech to the Institute of Education tomorrow, Mr Blair will unveil new measures to raise standards and underpin the ethos of the document.
While most local education authorities were satisfied with the shift of policy, it is denounced by Roy Hattersley, former deputy leader of the party, in today's Independent. Mr Hattersley says the party is about to "repudiate the principle of comprehensive education".
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