Millions of low-income families in the United States could benefit from a tax credit system, which could breathe new life into the school voucher system.

Vouchers had seemed to be fading from the education agenda in the United States, but the principle of parents being allocated a state allowance for education has returned as a tax credit.

In budget proposals for next year, President Bush has outlined plans for a $3.5bn tax credit which would provide subsidies for educational expenses.

These would be targeted at families with children in failing schools - and would allow them to use tax credits as payment towards private school fees.

It is anticipated that this could be available to the families of 4.5 million children.

The tax credit, up to the value of $2,500 a year, could be used to cover up to 50% of the cost of fees, tuition, books, travel to school, computers or other educational equipment.

Trapped

The intention is to support low-income families who feel that their children are trapped in underachieving schools.

And the full value of the tax credit would be available to families even if they did not pay that much tax each year.

The subsidies could also be available to well-off families living within the catchment areas of failing schools.

This is likely to trigger claims that voucher systems are subsidies for affluent families with children already in private schools.

School vouchers had been a key element of the president's education policy, but they had been sidelined in an effort to push through a package of education reforms.

Lacking parent appeal

Although promoted by right-wing educational campaigners, school vouchers have never mustered much enthusiasm among parents.

In a series of ballots, including a state-wide vote in California, school vouchers had been rejected, amid claims that they would damage the state school system.

Advocates of vouchers argued that it would allow parents more choice and would encourage all schools to improve.

But opponents have argued that vouchers would mean pouring large amounts of state school funding into the private sector, further widening the gap between private and state schools.

This would bolster a private sector used by more affluent families, while leaving a downgraded and underfunded state school system, which would still have to be used by a majority of students.

Watchdog questions spending

And campaigners against vouchers could also point to value-for-money research carried out on behalf of the US General Accounting Office, which found voucher schemes made little positive impact on achievement.

This public spending watchdog examined voucher schemes in Cleveland and Milwaukee and found that the tens of millions of dollars of public funding was not rewarded by improved results.

The tax-credit proposals could re-open the vouchers debate, with the taxpayers' rebate perhaps offering a more parent-friendly image than vouchers.

In the United Kingdom, the leader of the Conservative party, Iain Duncan Smith has spoken in favour of education "credits", which he distinguished from vouchers.

In a debate during the leadership election in 2001, he indicated that he was sympathetic to providing credits for families with children in underachieving schools, which could be used to help them find an alternative school place.

Mr Duncan Smith did not indicate whether this credit would be in the form of a tax rebate, direct financial support or a voucher.

His opponent in the leadership campaign, Kenneth Clarke, had dismissed vouchers as something rejected many years ago by Conservatives as irrelevant to the practical problems of improving schools and widening parental choice.