The Guardian (p12) reports that analysis of government figures suggests the money received through bidding by local authorities varies widely, with no clear correlation between funds granted and pupils' deprivation.
The study also reveals that only a third of bids for money to drive up standards, lower class sizes or improve buildings are successful, with 16,000 having failed since the general election.
The system was condemned last night by Don Foster, the Lib Dem education spokesman, as 'wasteful and blatantly unfair'.
The Lib Dems oppose moves to shift education spending from LEAs to central government. Between 1998 and 2002, a further 4% of school spending will be distributed centrally, according to Lib Dem figures.
A government source dismissed the criticisms, saying the difference would even out in a few years. The government was spending twice as much as the Conservatives on school capital programmes, he added. 'The issue of which bid is successful is the urgency of need and the quality of the proposal.'