An awards scheme which pumped hundreds of thousands of pounds into Sussex's cash-strapped schools has been axed.

The Government said there was no hard evidence the school achievement awards improved performance.

But the news is a blow to head teachers who have received cash handouts of up to £25,700 each over the past three years.

Last year there were 29 winners in Brighton and Hove, 81 in West Sussex and 47 in East Sussex.

Some headteachers have picked up the award, which rewarded improved performance in exams, more than once. It was worth an average of £25,700 for a secondary or £5,700 for a primary.

But the scheme had been condemned as "divisive" by teaching unions and opposition MPs.

Announcing the decision to axe the awards, David Miliband, the school standards minister, said: "Schools which have won awards should be justifiably proud of their achievements.

"However, the priority for funding is school budgets and a shift of money into school achievement awards is not justified."

Liberal Democrat education spokesman Phil Willis said the scheme was "a divisive and unjust new Labour gimmick".

Damian Green, the Tory shadow education secretary, said the scheme was "yet another failed education initiative from this Government".

Schools in Brighton and Hove and East and West Sussex have warned they expect to lose teaching posts as a result of a crisis called by a change in Government funding rules.

They were also hit by increased National Insurance Contributions and increases to teachers' pension funds.