The Public Accounts Committee expressed 'concern' over a funding discrepancy, which led to bonuses for self-governing schools of up to pounds 200,000 per year.
Its report says the Department for Education accepted that there had been 'a certain amount of generous treatment' of grant- maintained schools, and that this had been ordered by ministers.
The payments cost local authorities such as Essex and Berkshire, where large numbers of schools had opted out, more than pounds 1m annually. Compensation for the loss of local authority services was paid twice over to more than 250 opted-out schools.
Last month, the department announced that grant-maintained schools would lose 10 per cent of their extra payments each year, and that as inflation would also eat into the fixed sums, the bulk of the money would be restored to local authorities within four years. However, the committee recommended that the period should be reduced to within two years.
It also expressed concern that weaknesses had been identified in the financial systems of the Grant-Maintained School Centre, which gives support to opted-out schools. The department said it was satisfied there had been no fraud or impropriety. Ann Taylor, Labour's education spokeswoman, said the report revealed 'yet another example of the growing wave of sleaze in the conduct of the Conservative Government'.