EDUCATION minister Jim Knight has abandoned unpopular plans for a retrospective smash and grab on school coffers.

The government wanted to claw back millions by forcing headteachers to hand over five per cent of any school savings at the end of the financial year.

Despite some backing from teaching unions, many headteachers, MPs and school governors argued the proposals promoted poor financial management and were an attack on schools that acted prudently.

If ministers had pressed ahead the levy would have been backdated to balances as they stood at the end of March 2007.

Lib Dem Mid Dorset MP Annette Brooke, who tabled an Early Day Motion calling for the scheme to be scrapped, said: "This daft idea should never have seen the light of day.

"Headteachers and governors across the country were outraged about how the claw back was set to have a devastating impact on their school budgets and could even have led to staffing cuts."

Mr Knight told the Commons he recognised concerns raised during the consultation process.

He said: "I have listened carefully, based on the responses from a range of stakeholders, and rather than proceed now we will continue to discuss these detailed concerns with schools and work with local authorities to lower excessive surplus revenue balances."

However, he promised to monitor overall surplus balances and if levels do not drop significantly, further action will be taken.

Poole Grammar School headteacher Ian Carter said: "I am delighted at the fact common sense has at last come through.

"It was poorly thought out in the first place, so maybe now the government will have a little more time to think up something appropriate," he added.

Under the abandoned plans local authorities would have redistributed the cash to other local schools.