The Government's five-year education plan will pave the way for reform of the ''ramshackle'' school funding system in England, Education Secretary Charles Clarke signalled today.

But he insisted that the plan, being unveiled tomorrow, would not mean the disappearance of local education authorities, which had a ''very, very important role to play''.

And he defended the Government's intention to expand the number of city academies to 200, despite concern that there was as yet little evidence that they were a genuine improvement on the failing comprehensives they replaced.

Giving evidence to the Commons Education Select Committee, Mr Clarke said that LEAs would continue to have a role allocating resources to the schools in their area, helping those that were struggling to improve, and in providing ''strategic leadership'' for the local education service.

It was difficult to see how a system where the Department for Education and Skills funded 26,000 state schools directly could be made to work, he told MPs.

''The idea that the DfES could press a button here and stick it out there I think is the wrong view.''

But Mr Clarke added: ''What I do think is we want to achieve certainty in funding regimes.

''That does require some changes in the balance of the relationship.''

Some people argued for a national funding system but Mr Clarke said: ''I don't think that remedy is a feasible way of doing it or an effective way.''

In May, Prime Minister Tony Blair said the Government wanted to move to a three-year budget cycle for schools to give headteachers more certainty about the cash they had available in order to avoid a repeat of last year's budget crisis.

Mr Blair said the funding cycle should be aligned to the school and not the financial year - a move that was widely welcomed by heads.

Tomorrow, Mr Clarke is expected to make clear that LEAs will in future have no discretion on what proportion of the money they get from Whitehall is passed on to heads.

That should mean that the days of state schools being part-funded by council taxes will come to an end and it is understood that no authority will have less to spend in future than it has in the past.