The mystery of why schools are suffering cashflow problems while county managers say they have no more money to give has been partially solved following the publication of Government figures.

Most Oxfordshire secondary schools have reported deficits of more than £100,000.

Windmill First School, in Blackbird Leys, Oxford, blamed debt and poor budget settlement for their decision to sack seven teaching assistants.

Conscious of complaints from headteachers that their budgets had been cut, the Government published figures showing how local authorities disposed of money earmarked for schools.

Schools minister David Miliband said some councils had not passed on extra schools funding.

The figures for Oxfordshire show that although all the Government money was given to schools, £5.7m earmarked for revenue funding -- money to run schools and pay wages and bills -- was spent on capital programmes instead. This included the purchase of new equipment and buildings.

Education officers said Oxfordshire's large number of small schools meant more money was needed for capital spending.

Matt Bowmer, the county council's head of finance for education, said an investigation had revealed that changes in the pay scale for teachers was eating into school budgets.

He said: "The key reason why our schools are under pressure seems to be due to teachers' pay awards.

"The structure of teachers' pay has been changed, effectively forcing up teachers' pay. But the Government hasn't funded it.

"For example, a Government initiative to keep good teachers in the classroom under Pay Scale Progression 2 has cost us £1.5m, but we've only been given £900,000 for it."

He said increases in National Insurance and pensions contributions had been fully funded by the county. The council was also forced to spend an extra £900,000 to increase the number of places for three-and four-year-olds, in line with Government targets, and a further £700,000 was earmarked for special needs pupils.

Mark Forder, branch secretary of the NUT in Oxfordshire, blamed the Government and the council for the problems facing schools.

He said: "The problem is, neither the Government nor the county council really knows enough about its workforce to predict how changes in the pay scale will affect individual schools.

"We think Oxfordshire's schools have been underfunded compared with other authorities for years."

He added: "We blame the council for not putting up council tax to compensate for that."