Local government leaders say that ending council involvment in education would be an expensive mistake.

The loss of local authority services to schools and the direct funding of school budgets would cost over �5bn, claims the Local Government Association.

The claim follows a series of moves by the government to replace or by-pass the involvement of councils in running schools - and comes as the government is reviewing the future funding of local government.

In last month's Budget, the government provided an extra �300m directly to schools, with claims that local authorities would have failed to pass on the full amount.

The government has repeatedly accused some authorities of failing to give schools the extra money intended for education.

And after a critical inspection reports, a number of councils face the privatisation of education services, after the government introduced legislation allowing intervention in struggling authorities.

But the Local Government Association says that if local authority involvement in schools was completely withdrawn, this would mean the loss of the �500m extra that councils give to schools above the levels set by government.

The setting up of a direct funding agency for schools would also cost �300m, says the LGA,

And any national funding system would have to achieve a more equal provision of school budgets - and levelling up to the best funded would cost another �4.4bn.

"These startling figures prove it is not only democracy but the public purse which is threatened by any plans to cut out local councils from funding schools," says Dave Wilcox, LGA education finance chairman.

"The LGA is committed to a review of school funding but will not tolerate the scrapping of the locally based structure in favour of an expensive, centralised agency."