In the paper from the right-wing think-tank Politeia, the controversial chief inspector says an extra pounds 1bn spent on education would not necessarily raise standards.
Don Foster, the Liberal Democrats' education spokesman, said Mr Woodhead was "barmy" and accused him of allying himself with the Conservatives. "He is tying himself the whole time to the failing Tory party. If he thinks pounds 1bn spent on early-years education won't help both education and the economy, he must be barmy."
A billion pounds would pay for pre-school education for all three- and four-year-olds. The Liberal Democrats say they would put a penny on income tax to pay for better education.
Labour is also understood to be concerned that Mr Woodhead is advancing partisan political views instead of those of an independent chief inspector.
Mr Woodhead says: "We can make significantly better use of the resources currently allocated to education. Would, however, a decision to find, say, an extra pounds 1bn for education necessarily cause standards to rise? The answer is that it would not."
His pamphlet attacks Judge Stephen Tumim, the former Chief Inspector of Prisons, who said recently that the fact that prisons were full of "basically uneducated" young men was the fault of under-resourcing and class size.
"He is wrong," says Mr Woodhead. "The problem in general is not the special educational needs of the child. It is the failure of the teacher to teach."
If they did, he says, standards would rise, huge sums spent on remedial teaching would be saved, and, if Judge Tumim were right, the prison population would be reduced.
Mr Woodhead says the dogma of child-centred learning which has dominated educational thinking since the 1960s is responsible for pupils' poor results. "To imply that the student can [and should] be left to switch on to the world for himself would be thought disingenuous by some; certainly it is misguided."
The drive to improve standards should ignore "the siren half-truths of those who would do away with subject boundaries and any notion of the teacher as an authority".
The pamphlet questions the existence of local authorities because of the "dependency culture" they create. Good schools, it says, are led by confidentheads. Does the very existence of the local authority militate against the exercise of such leadership? it asks.
Mr Woodhead acknowledges there is a case for keeping local authorities but asks whether schools might be better served by commercial agencies.
8 A Question of Standards: finding the balance; Chris Woodhead; Politeia, 28 Charing Cross Road, London WC2 0DB; pounds 5.Reuse content