David Cameron was embarrassed yesterday when a Conservative-controlled council admitted it was considering plans to subsidise the fees of children attending private schools if their parents lose their jobs.
The Tory leader moved to squash a proposal by the London Borough of Bromley to pay up to £4,700 a year to enable pupils to remain at independent schools rather than switch to state schools in the area.
Labour used the controversy as a second front in its campaign to convince voters that the Tories could not be trusted on public services. Last week, Mr Cameron was forced on to the defensive after the outspoken Tory MEP Dan Hannan declared that the National Health Service was "a 60-year mistake" and Alan Duncan, the shadow Commons Leader, complained that MPs were "on rations" after disclosures about their expenses.
The Bromley proposal has echoes of the assisted places scheme, which enabled pupils from poor backgrounds to attend private schools but was scrapped by Labour after it took power in 1997. It also revived memories of an ill-fated Tory plan for the state to contribute towards private health treatment, which was ditched by Mr Cameron after being seen as a vote-loser at the 2005 election.
Local authorities are worried about an influx of pupils from private schools, as parents struggle to pay fees in the recession.
Councillor Ernest Noad, who leads for the Tories on children and young people on Bromley council, said concerns had been raised about what would happen to children in private education. "The idea is that we might be able to earmark money to keep a child in a private school. At the end of the day what matters is that each child gets a good education," he said.
His proposal is to use part of the money not passed on to schools, normally spent on children with special needs, to contribute towards private school fees, which average £12,000 in the borough. Bromley receives £4,700 per pupil in central government grants.
Gillian Pearson, Bromley's director of children and young people services, said: "We are at the early exploration stage in considering this issue as part of our overall annual review of school places and school organisation. As with any proposal of this type, we will give full consideration to all the key factors which would include the educational case, the need in terms of place planning, the associated costs, the legal framework and other local authority practice."
The plan rang alarm bells among the Tory leadership in London. After it contacted Bromley council, the authority's Tory leader, Stephen Carr, insisted it had "no plans" to introduce such a scheme. "There is no suggestion that this will be pursued," he said.
Tory sources denied that pressure had been put on Bromley council to shelve the scheme. They insisted that there was no prospect that it would become official Tory policy, although local authorities would have the freedom to pursue the idea.
Labour said the proposal would be unpopular among parents who send their children to state schools. Iain Wright, the Schools minister, said: "Last week we saw what the Tory party really thinks about the NHS and now we see how hollow their commitment to state schools really is. Is David Cameron using this Tory council to float a policy proposal he is secretly thinking of adopting?"
Education leaders criticised the proposal. Graham Cruer, from the NASUWT union, said: "It would be immoral to use money in this way."