Essex, a hung council, is taking legal advice about a possible challenge to Mr Patten's decision to compel the two authorities to take part in the pilot.
The Government wants to introduce a common funding formula for all opted-out schools. Robin Squire, Under-Secretary of State for Education, said no opted-out school would receive less than its cash budget for 1993-94 and that a grant- maintained school's budget would be linked to that of its neighbouring local authority.
About one-third of councils spend less than the Government's the standard spending assessment. In these areas, opted-out schools' budgets will be based on what the authority should be spending.
Unless councils in these areas increase local authority school budgets to match opted-out schools, the former will be worse off. Councils like Essex, which spend less than the Government estimate, fear they will be forced to increase budgets to stop remaining schools opting out.
A spokesman for Essex County Council said: 'We are horrified. This is another way of providing money for grant-maintained schools from the pockets of other schools and from the county council's budget in general.'
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