The Government is facing increased pressure to scrap the public-private schemes which build new schools and hospitals following a damning report.

The Audit Commission says in its report that schools built under the flagship profit-making schemes are "significantly worse" than those traditionally funded by local authorities.

The commission found that schools built through the early Private Finance Initiatives (PFI) had too small classrooms, inadequate heating, poor ventilation and storage space.

During the early years of PFI, schools were not any better designed or better value for money than the ones built by councils which raised the money themselves, said the commission.

The report has prompted calls by unions to urgently review PFIs -- which involve private companies building schools and hospitals and maintaining them for up to 30 years.

Dave Prentis, general secretary of Unison, said: "PFI is failing to live up to its promises and it's about time the Government accepted that."

Kevin Curran, of the GMB northern region, said: "There is more and more evidence stacking up against PFI. It would be madness for the Government to throw yet more taxpayers money at PFI when evidence proves it is expensive, does not deliver improvements to our public services and is not publicly accountable."

Dr Dick Waite, senior researcher at the Audit Commission, said that on the evidence collected so far he would not recommend forcing local education authorities to use PFI for building all new schools.

School Standards Minister David Miliband said the Government had already acted to improve the scheme.

''The Audit Commission's report is based on very early examples of PFI," he said. "We have studied these schemes ourselves and put in place significant reforms of the procurement process to learn their lessons.