Priority will go to "areas with the poorest standards and greatest needs".

It is proposing to set up a new national procurement body to oversee the allocation of the money from 2005-06.

But Conservatives in local government vowed to fight the "Soviet-style" plan.

'Realising a dream'

Ministers have asked architects and construction companies to come up with six designs of what 21st Century schools should look like and the Department for Education said it had received more than 300 expressions of interest.

Publishing a document outlining the government's proposals, Mr Miliband said he had in mind the use of information and communication technology throughout the school, flexible spaces for small groups of pupils to learn, plus theatre, sport and music areas.

"These are the sort of things you can see in some schools and city academies but you certainly don't see in as many schools as we would like."

Mr Miliband said: "Every child deserves to learn in modern school buildings with excellent facilities. Until now, this has just been a dream for most schools.

"Our massive investment in school buildings means the transformation of our secondary schools is within our grasp."

'Soviet-style'

Details of the new procurement body are still being worked out.

The department said it would aim to get "best value for money" using the Private Finance Initiative (PFI) and other methods.

But the Conservative education spokesman on the Local Government Association, Peter Chalke, said it was "an unprecedented and savage attack on local government".

He said it failed to understand that local education authorities were in the best position to target resources effectively - "not some centrally-controlled body that will hand out cash on a Soviet-style basis".

He said the idea of standardising school design similarly ignored local requirements.

"Schools will be picked off the shelf in the same way that supermarket chains choose their new stores from a standardised list."

Cllr Chalke added: "Local government is sick and tired of being dictated to in just this sort of way.

"Local government is totally opposed to these measures and will fight them tooth and nail."

Increased investment

Labour has hugely increased capital spending in schools, with 650 schools being replaced or completely modernised.

There are 21,500 maintained schools in England - about 18,000 primaries and 3,500 secondaries. Six in every seven were built more than 25 years ago.

Capital investment is due to reach �5.1bn by 2005-06.

But a recent report from the Audit Commission said the government needed to re-examine the way it allocated money, as it was not being directed to the areas of greatest need.

There were also concerns that some head teachers were not able to supervise building projects adequately to ensure that money was spent efficiently.