Whitehall could take full control of state school funding in England under proposals drawn up by ministers to remove the role of town halls, it was reported today.
A switch to a "national funding formula" is Education Secretary Michael Gove's preferred option for reform, according to a draft copy of a forthcoming White Paper seen by the Financial Times.
Centrally resetting the budgets for primary and secondary schools would end the present "opaque and illogical system" of allowing local authorities flexibility to decide budgets, the paper was reported to say.
Headteachers would also be given extra freedom over spending their allocation..
A consultation on the changes is expected to start early next year, before the introduction of a new system from 2012, and ministers will be braced for a backlash from councils - especially those who would lose funding.
The question of whether there should be "any local discretion" is among questions it will pose.
A spokeswoman for the Department of Education said: "We believe the way education is funded at the moment leads to huge variations in the money similar schools receive so we want to introduce a fairer and more transparent system.
"Details will be set out in our White Paper later this year."
The Conservative councillor in charge of education policy at Birmingham City Council told the newspaper he was "absolutely flabbergasted" by the idea.
Les Lawrence said: "What happened to decentralisation? What happened to the coalition mantra of getting rid of quangos? This is centralised control of school funding.
"How the hell can you fund a school in rural Devon on the same basis as inner-city Birmingham?"