Senior Conservative sources confirmed that the manifesto will say that schools should have more discretion over the money they spend.
It will heighten suspicions that the Government is intent on side-stepping Labour education authorities to overcome allegations of cuts in spending on schools when the education budget has been increased.
The Prime Minister spoke of his frustration in a local radio interview for Lantern FM, during a campaigning tour of north Devon.
Answering claims that local schools had been starved of cash, he said: "We still have a problem that too high a percentage of the money that the Government provides for education is held by education authorities at the centre and not dispersed to the individual schools. So you have a frustrating position - the Government says we have provided more money but the people in the schools say we have less money. Sometimes the people in the schools are right because the authorities have held back the money.
"What we propose to do is legislate to make sure the money is not held back by education authorities but make sure it goes through to the school, the headmaster, to the governors in the way they think is most efficient."
The Government first announced plans to force local authorities to increase the amount of money they passed on to schools in a White Paper last summer. It said it would raise the level from 85 per cent to 95 per cent, a move which would increase schools' spending by pounds 90 per pupil, according to Gillian Shephard, the Secretary of State for Education.
Last night, a spokeswoman for the Department for Education and Employment said it wanted to consult fully before putting forward proposals. No formal consultation paper would now be published before the general election, she said.
The plans, under existing arrangements for local management of schools, would be bound to cause some discomfort among local authorities because they would eat into the remaining services which were still held centrally. Although schools now have control of their own budgets, councils have so far been allowed to keep back 15 per cent to pay for such things as education welfare officers, special needs advisers and school admissions services.
It is likely under the Conservatives' plans for 95 per cent delegation that the education authorities would have to turn most such services into independent agencies and invite schools to buy into them with the extra resources that they have been given. Both the Conservative and Labour parties are committed to local management of schools, although the Government's previous attempts to force councils to delegate 90 per cent of their budgets were dropped.
Labour has said that it wants to raise the proportion dispersed to schools from 85 per cent to 90 per cent, and that within that figure, the amount which should be spent on administration should be no more than pounds 50 per pupil.Reuse content