Although no school will be forced to go selective, governors will have the right of appeal if a local authority tries to prevent them from doing so. Wherever a new school is needed, the funding agency for grant maintained schools will have to consider whether a new grammar school should be built.
Last night Gillian Shephard, the Secretary of State for Education, stressed that the Prime Minister's dream of seeing a grammar school in every town, expressed in a speech in Birmingham last September, would depend on the wishes of parents and governors.
"We are not proposing a return to a two-tier system. The point is that we want schools to develop their strengths. In a town you might have a fully selective school or a school with a selective stream together with a specialist college and a comprehensive," she said.
Labour's education spokesman, David Blunkett, dismissed the proposals as "the last gasp of a government which has run out of ideas". Only six schools had chosen to select by academic ability under the current system, he said.
"There is no demand, there is no need and there is no money for this policy of bringing back selection. It has nothing to do with increasing excellence and standards for all and everything to do with the short-term political agenda," he said.
The paper has three main functions: extending selection; giving more freedom to grant maintained schools; and extending a greater proportion of the budget to local authority schools. In future all grant maintained schools will be able to select up to 50 per cent of their pupils without special permission, specialist technology and language colleges will be able to select 30 per cent and local authority schools 20 per cent. Each year, every school's governor must decide, in consultation with parents, whether they might contribute to the choice available locally by selecting some pupils.
Where a new school is needed, the Funding Agency For Schools will be able to propose a grant maintained school regardless of how many pupils in the area are already in opted-out schools. At present it can only do so where more than 10 per cent already attend them.
In doing so, it must consider the level of choice in the area and how this might be extended through selection. Grant maintained schools will no longer need to seek permission if they want to increase their numbers by up to 50 per cent, open a nursery class or start a sixth form. They will also be able to run their own transport services if they wish.
However, new powers are also to be introduced for the government to send "hit squads" into failing grant maintained schools. If a local authority school fails it can be taken over and made to go grant maintained, but there is no such measure available in opted out schools at the moment.
Powers will also be introduced for the Government to inspect local authorities to see whether they are meeting their targets.
Authorities will be forced to increase the amount of money they pass on to schools from 85 per cent to 95 per cent of the total budget. This would increase schools' spending by pounds 90 per pupil, Mrs. Shephard said.
The paper was dismissed by local authorities, teachers' organisations and opposition politicians last night as a political gesture designed to appease the right wing of the Conservative Party.
Mrs. Shephard understood the strengths of the comprehensive system but had been forced into backing more selection by the Prime Minister, they said.
David Hart, general secretary of the National Association of Head Teachers, said the proposals would prevent Britain from meeting its targets for raising educational standards.
"The government is living in cloud cuckoo land if it believes that more selection will raise standards for the average and below-average ability pupil. Creaming off the most able pupils will lead to a rising underclass and to the creation of sink schools," he said.
Nigel de Gruchy, general secretary of the National Association of School Masters/Union of Women Teachers said: "Allowing comprehensive schools to select up to 20 per cent of pupils makes a mockery of the comprehensive principle. Privately, Gillian Shephard must be hoping that she will never have to implement any of the zany ideas put forward in the White Paper."
However, the local authorities described the paper as "a mixed bag of sense and predictability."
Graham Lane, chair of the Association of Metropolitan Authorities' education committee, said the renewed role of local authorities in improving schools was welcome, and that increased delegation of spending would be accepted. But none of the proposals would solve the education services' under funding crisis, he said.
"Opening new schools and expanding existing ones requires money. With a pounds 3bn backlog on repairs and maintenance, the government knows it can barely afford to fund even a single token project.