Education Secretary Charles Clarke has used new powers to force two councils to give more money to its schools.

He has told Croydon and Westminster to set higher budgets for their schools - in line with the increase in funding from central government.

It is the first time he has used new powers given under the Education Act of last year.

Mr Clarke said the great majority of local education authorities (LEAs) in England had passed on the increase in schools funding.

"In these two cases, the authorities had proposed schools budgets that would not allow their schools to meet pay and price increases next year.

"Their plans as notified to the Department would have failed to pass on the increase in schools funding by a significant amount."

Delighted

The department wants Croydon to put an extra �3m into its schools - which would mean they were passing on 92% of the national increase.

Westminster is being told to spend an extra �3.2m - taking the total passed on to 80% of the increase.

The Department for Education and Skills said 124 of the 148 LEAs in England had passed on all of the national increase in spending to schools.

Mr Clarke's action has been welcomed by head teachers.

John Dunford, the general secretary of the Secondary Heads Association, said he was delighted.

"For too many years, a funding fog has enabled the government and the LEAs to blame each other for low school budgets, while school leaders have had to cope with the consequences.

"Schools were heading for major problems in Croydon and Westminster and the heads in those two LEAs will look forward to much improved budgets when the revisions have been made."

Appalled

Government education officials are talking to Croydon and Westminster.

They say the higher budgets will be forced on the LEAs if they do not raise them voluntarily.

Westminster Council leader Simon Milton said he was "absolutely appalled".

"This decision will result in higher local taxes or reduction in essential services in the heart of London.

"The Government has promised Westminster additional freedoms as a high performing local authority yet its first action is to force us to passport more grant to schools at a time we have received the minimum possible increase in government grant and have lost cash as a result of the flawed census.

"The entire increase in grant from Government will now go on education."

Croydon Council leader Hugh Malyan said the DfES was out of touch.

"At this moment, however, it would seem the Secretary of State may well have taken leave of his senses," he said.

"As a high performing authority, we are meant to be receiving extra freedoms, not having them taken away.

"Perhaps the Secretary of State would like to indicate to us which other services we should cut to honour his demands."