£1 billion meant for schools was not spent by the Government last year - just days after it accused Brighton and Hove City Council of failing to spend £3.4 million.

Furious headteachers have accused ministers of hypocrisy and demanded the money is released immediately to solve the cash crisis facing schools.

Education Secretary Charles Clarke has given Brighton and Hove's education chiefs until next Monday to explain where they have spent their cash.

He also asked East Sussex County Council to explain why £1.4 million earmarked for individual schools has not been allocated.

Today it emerged Mr Clarke's own Department for Education and Skills had a massive £1 billion underspend last year - the biggest of all government departments.

The £1 billion pot is almost twice the total of £590 million local education authorities have been accused of not allocating.

City council children's director David Hawker said the revelation indicated the lack of communication between local authorities and Whitehall.

He said: "This shows how counterproductive it is for either side to start accusing the other. This is a crisis we need to work together to solve, through proper discussions around the table.

"The crux of this issue is that schools have not been given enough money this year and the system is clearly underfunded.

"If the Government has got an underspend, surely it can inject extra money where it is needed."

He added that details of the unaccounted-for £3.4 million will be sent to Mr Clarke's department within the next couple of days.

Schools councillor Pat Hawkes described the situation as "a lunatic saga".

She added: "It has reached a ludicrous point. We need Mr Clarke to make a clear statement about why this money has not been spent."

General secretary of the Secondary Heads Association John Dunford said: "No wonder we have such a serious funding crisis in schools."

A Department for Education spokesman said £300 million of the £1 billion underspend was tied up in delayed building projects.

Mr Clarke wrote to all 148 LEAs last Friday, requesting them to explain by Monday why they had "unallocated budgets".

Last week, The Argus told how Brighton and Hove faces a shortfall in its total education budget of £1.4 million after having to increase payments to the teachers' pension fund by five per cent.