After last year's shortage fears, schools are promised a guaranteed increase

The funding plans, announced by School Standards Minister David Miliband, have been welcomed by head teachers.

Schools are being promised the extra funding as a guaranteed minimum - but it is expected that the national average increase will be about 7%.

The extra cash will have to pay for a workload reduction deal with teachers.

Workload deal costs

The bigger increase for primary schools reflects that they will face higher costs than secondary schools in introducing the workload agreement.

This deal is intended to allow teachers more time for planning lessons and marking.

EDUCATION SPENDING PLANS Average spending increases of 4.4% above inflation each year up to 2007-08 Spending per pupil in England: 1997: �2,500 2004: �4,500 2007: �5,500 UK education budget: 1997: �36bn (�29bn England) 2004: �63bn (�52bn England) 2007: �77bn (�64bn England) Education spending (GDP): 1997: 4.7% 2004: 5.4% 2007: 5.6%

The National Association of Head Teachers said that it welcomed the "very substantial package" for primary schools, "because it is they who will face the greatest cost pressures under the agreement".

The NASUWT teachers' union has warned that this extra funding will mean that schools will have no excuses for not implementing the deal.

This funding arrangement for 2005-06, will be the last single-year settlement - as the government is to shift school funding to a three-year budget cycle, so that schools can have greater financial stability.

Mr Miliband said that the extra funding will cover the increased cost from implementing the workload agreement.

The agreement has been signed by the government and most of the teachers' unions - but the biggest, the National Union of Teachers (NUT), has refused to accept the deal.

The funding settlement says cost pressures on secondary schools will be between 3.8% and 4% - and 4.6% and 5% for primary schools.

Funding shortages

But a statement from the heads' and teachers' unions which have signed the deal says they are expecting average increases of 7% - which will allow them sufficient financial "headroom" to cover the costs of the agreement.

The setting of a minimum guaranteed increase for schools follows the embarrassment of last year's school funding shortages.

The funding promises announced on Tuesday follow the government's spending plans, announced by the Chancellor Gordon Brown.

This confirmed that public spending on education would rise to �77bn over the next three years - up from the current �63bn.

This will create an extra 100,000 childcare places, a pilot extension of nursery places for two year olds, 200 more city academies and will give specialist status to another 1,000 secondary schools.

The Shadow Chancellor, Oliver Letwin, dismissed the government's overall spending plans as a "manifesto for fat government".

"What this review really means is more bureaucracy, more targets, more initiatives, more task forces, more centralisation, more regulation, more borrowing and more taxes," he added.