The decision, welcomed as a victory by the opposition Socialists, will do little to defuse the controversy over the reform, which presents Edouard Balladur, the Gaullist Prime Minister, with one of his most delicate problems since he took office in March.
Earlier in the day, President Francois Mitterrand put himself in the left-wing camp by backing groups which called for a rally on Sunday.
Tens of thousands are expected to demonstrate against the reform of the Loi Falloux, a 144-year-old measure limiting the amount of money local authorities can give to private schools.
In the Socialist Party weekly Vendredi, Mr Mitterrand, whose second seven-year term as President ends in 16 months' time, noted that earlier education battles a decade ago, when the Socialist Party was in full power, left the impression that 'we were all right for 20 years'. But, 'nine years later, another conflict has erupted', he added, denouncing 'the spirit of vengeance, this perpetual guerrilla'.
Mr Mitterrand's language, and the Socialist publication in which he - who has declared himself above party politics - expressed it, prompted Mr Balladur to speak out against the quarrels 'of another age'.
The dispute arose when Mr Balladur encouraged the Senate last month to put reform of the Loi Falloux on the agenda and push it through in an overnight session. The issue touches on various nerves. Private schools, where teachers' salaries and many other expenses are paid by the state, are largely run by the Catholic Church. As such, they run counter to the secular tradition engendered by the French Revolution.
Because of state funding, private schools are not just the preserve of the rich; in some areas, as many as 40 per cent of French schoolchildren attend private establishments.
The ruling of the Constitutional Council was limited in its criticism. Its objection was that the text as adopted amounted to unacceptable favouritism for private schools over state schools.Reuse content