The money, part of the pounds 250m windfall for education from the Budget, will be used to replace temporary classrooms and it is expected that some will be targeted at rural areas. Around pounds 100m of the Budget increase for education was allocated for training and computer projects, with around pounds 40m for education in Wales and Northern Ireland.
Mr Blunkett has been arguing for more money from the Treasury to meet Labour's election pledges on education. He is looking for a much bigger increase in his budget from the comprehensive spending review across all Whitehall departments.
A ministerial source said education needed billions of pounds more to enable the Government to meet its general election promise to spend more of Britain's wealth on education than the Tories.
Ministers are expecting much of the money to come from cancelled or delayed defence contracts.
Tony Blair gave a clear hint yesterday that he is planning to meet Labour's pledges to the voters on education and health by promising year-on-year increases for the remainder of the Parliament.
A rolling programme of investment could enable ministers to promise an extra pounds 2bn year on year for the next three years for health, and a similar big boost for education.
The Prime Minister told MPs that he wanted to get into a cycle "where investment carries on year on year so we can get away from the situation under the Tories from spurts in spending followed by cuts."