Charles Clarke told local authorities to pass on all the money

In a Commons statement, Education Secretary Charles Clarke promised every school would get a minimum per-pupil increase.

Allocations will also be announced in the autumn instead of during the winter, to give head teachers more time to plan ahead.

The �800m, to be provided in 2004-5 and 2005-6, represents a reversal of previously announced cuts in the pot of money known as the Standards Fund.

Back in black

This went to selected schools to raise attainment, by means such as cutting class sizes or teacher training.

The cash has been taken out of the Department for Education and Skills' (DfES) unused funds, estimated by the Treasury to be �846m last year.

Mr Clarke also said those "few" schools that could not get back in the black despite their best efforts were in line for "limited, transitional support".

He recently freed up almost �300m earmarked for repairs and building work to pay other bills, notably salaries.

But he has acknowledged that the biggest concern of many head teachers was the impact of the loss of Standards Fund money this year, which left many facing unexpected deficits running into hundreds of thousands of pounds.

They were also angered by the late announcement of a large rise in teacher pension costs.

'Hugely damaging'

Mr Clarke said local authorities would have to "passport" all money set aside for schools to head teachers.

He also told MPs he hoped to announce key decisions affecting school finances in England in November.

Shadow education secretary Damian Green said the funding crisis had been "unnecessary and hugely damaging".

He added: "The government tried blaming local authorities, they have even tried blaming heads for paying teachers too much.

"The ludicrous nature of this attempt to shift the blame from the Department, where it belongs, has been finally revealed today, when we learn that his Department underspent by �846m last year."

Many schools have had to lay off staff as a result of the funding crisis.

Doug McAvoy, general secretary of the National Union of Teachers, called the government's announcement a "political fudge".

He added: "The problem is our schools are short of funds. Because the education secretary refuses to remedy his funding mistakes, he continues to seek scapegoats whether head teachers or local education authorities.

John Dunford, general secretary of the Secondary Heads Association, said: "School heads will be very disappointed that there is to be no additional funding for this year to help schools worst hit by the changes that impacted on school budgets from April 2003.