Prescott pulls rank on Clarke

Education Secretary Charles Clarke has been wounded in a Whitehall turf war which has seen John Prescott set up a task force to sort out the schools funding crisis.

The Deputy Prime Minister suddenly pulled rank on Mr Clarke in a bid to sort out the mess over this year's record investment in schools.

Mr Clarke, who has carved out a reputation as a political bruiser, has accused councils of holding back £500million meant for schools.

But council chiefs have hit back fiercely - and have
won key posts on an "emergency committee" set up by Mr Prescott and charged with reporting on the crisis in six weeks.

It will be only the start of a long-running dispute over education funding. Mr Clarke wants schools to have more control while Mr Prescott favours the retention of powers by town halls. The task force is said by Whitehall insiders to have a majority of local government sympathisers.

Its membership includes Mr Prescott's deputy, local government minister Nick Raynsford, Sir Jeremy Beecham, the Labour chairman of the Local Government Association, and Sir Sandy Bruce-Lockhart, his Tory deputy. Also on board will be schools standards minister David Miliband and, importantly, a Treasury minister

Many at Westminster believe Mr Prescott's march onto Mr Clarke's territory is winning behind-the-scenes encouragement from Chancellor Gordon Brown.

The Chancellor has forged a Cabinet alliance with Mr Prescott and has crossed swords on a number of occasions with Mr Clarke, particularly over top-up fees for students.

The latest row has led to a fresh series of splits in Whitehall with supporters of the education secretary claiming the long-term review of school funding was solely in Mr Clarke's hands and out of the range of Mr Prescott's committee.

A spokesman for Mr Clarke said it was "24-carat rubbish" to claim that there was any kind of rift between him and the Deputy Prime Minister.

Mr Clarke wants a return to more direct funding for schools, similar to the now discarded grant-maintained system introduced by the Tories in the Nineties, but that would cut local authorities out of the picture and be fiercely resisted in town halls and by Left-wing Labour MPs.

The row could mirror the dispute over foundation hospitals which last month led to the biggest backbench rebellion over a domestic issue since Tony Blair came to power in 1997.

Like the foundation trust issue, schools funding cuts to the heart of the ideological divide over how government should reform the public services.