David Blunkett, the Secretary of State for Education, published the first official tables showing how councils spend their education budgets.
They reveal huge differences in the amount authorities spend on central administration - from pounds 17 per pupil in Oxfordshire to pounds 167 per pupil in Kensington and Chelsea. The average is pounds 49 per pupil. The figures also show that 14 of the 148 English councils in the tables have not passed on even 90 per cent of the 5.7 per cent increase in spending provided by the Government this year.
Local authorities responded furiously, saying the figures were misleading and that the differences in spending reflected the needs of different authorities.
But Mr Blunkett threatened to use his new powers to force the worst offenders to spend more on schools and less on bureaucracy.
He said: "Many local authorities such as Hillingdon, Staffordshire and Portsmouth have low spending on administration and red tape and they delegate high levels of funding to schools and their pupils. However, some are still dragging their feet, depriving schools and pupils of their entitlement to extra funding."
Central administration costs are for "pure bureaucrats" such as the chief education officer and his team and officials who service the education committee. They do not include inspectors and advisers.
From next year, councils will have to hand over at least 80 per cent of their education budget to schools. Thirty one are still delegating less than 80 per cent, with Westminster passing on the lowest proportion - just 75.1 per cent, compared to 88.4 per cent in Southend.
Authorities will also have to cut their spending on central administration costs to pounds 75 per pupil in London and pounds 65 outside London if they want to stave off Mr Blunkett's intervention.
Graham Lane, education chairman of the Local Government Association, said: "We warned Mr Blunkett that his data was incorrect and asked him to hold back from releasing his figures."
He said a report compiled by the authorities showed that money given to local authorities for schools was not being spent on bureaucracy and red tape.
Westminster Council also rejected the idea that it was holding back money destined for schools and emphasised the complexity of the figures. While it accepted it delegated a smaller proportion to schools than other authorities, the remaining funds were spent on pupils, not administration, which cost only pounds 43 per pupil.
David Hart, general secretary of the National Association of Head Teachers, said the figures showed that too many councils were still not passing on money to schools. "But ... it is the enormous disparities of spending per pupil which still make education funding such a lottery. Heads will continue to regard the ... system as grossly unfair until the Government moves to a national funding formula."
The Cost of Bureaucracy
Local education authorities spending most per pupil on
Kensington and Chelsea pounds 167
Greenwich pounds 127
Manchester pounds 126
Islington pounds 104
Haringey pounds 103
Southwark pounds 100
Camden pounds 99
Tower Hamlets pounds 97
Merton pounds 95
Lewisham pounds 94
Local education authorities spending least per pupil on
Oxfordshire pounds 17
Barnsley pounds 22
Somerset pounds 22
Lincolnshire pounds 23
Hertfordshire pounds 26
Bradford pounds 28
Darlington pounds 29
Lancashire pounds 29
Shropshire pounds 29
Cheshire pounds 30