A funding proposal that has been criticised by unions as "bulk funding" has been rejected by an advisory group set up by Education Minister Hekia Parata.
The "global budget" proposal is the only one of seven funding ideas to be rejected by the 18-member group, which includes principal associations and the major unions.
The thumbs down does not mean the idea is dead in the water - Parata will eventually take the group's feedback along with any recommendations to Cabinet.
However, she this afternoon indicated the proposal would not proceed.
"I'm not about to rule something in or out in the middle of a process. But I do hear what they are saying."
The school funding ideas are part of the Government's Education Funding Review, which has also proposed scrapping the decile system and targeting funding to children deemed at risk.
Any replacement system will be in place by 2019 at the earliest.
School classes have been disrupted this month as 60,000 union members hold meetings about the potential changes to school funding.
The two main education unions, NZEI and PPTA, took the unprecedented step of calling the meetings together in the hope of pressuring the Government to drop the proposed changes.
Consultation documents published by the Government in June included giving schools a bulk allocation of funding - called a "global budget".
That funding would include cash instalments for school expenses and a credit system for salaries.
Principals would determine the split between cash and credit, with the flexibility to make adjustments during the year.
Un-spent credit would be paid out at the end of the year.
The Ministry of Education says the global budget system would not be the same as the controversial bulk funding of teacher salaries that caused widespread protest and was ditched in 2000.
That was because schools would not be charged teacher salaries - the schools would receive credits for their teachers, not funding to pay them.
Bulk funding was introduced on a voluntary basis in the 1990s and schools that opted-in were given money linked to their allocation of teachers. They could then spend the money as they wished.
The six proposals the majority of the funding advisory group agreed should proceed for further work are:
• Taking a per-child approach to funding.
• Targeting additional funding to students "at risk" of educational underachievement.
• More money for small and isolated schools.
• Proposals over how school property funding is delivered.
• Better accountability for student achievement.
• Supporting a diversity of education options, including state, state-integrated, partnership or charter schools, and private schooling.
Parata said she wasn't surprised by the group's recommendation that the global budget proposal not proceed.
"The group's report, and together with feedback from around 90 regional meetings with teachers and principals, will help inform my report to Cabinet on the options to take forward.
"The insight from staff right on the frontline of education is invaluable."
Green Party education spokeswoman Catherine Delahunty said Parata needed to scrap the global budget proposal.
"There has been no support for bulk funding - or global funding as the Minister prefers to call it - and it won't benefit our kids. The Minister must drop her plan for larger class sizes."