The news will be a double whammy for the industry in 2012 as work on the Olympics also comes to an end.

Analysis from contracts experts Glenigan shows cancelled schemes due to start in 2010 valued at £12bn before the annual figure rises to £22bn in 2011 and £24bn in 2012.

BSF projects worth £5.8bn are unaffected but starts may fall back sharply to only £466m by 2012. School schemes worth £873m are under review and projects worth £5bn have been scaled back.

Under BSF, 12 schools were completed by April 2008, with a further 42 and 115 completions in the 2008/9 and 2009/10 financial years.

This was scheduled to accelerate to 200 schools a year by 2011/12.

Allan Wilen, economics director, Glenigan said: “The immediate impact of the Government’s announcement on the flow of schools projects and construction output will be moderated by the fact that the last year, indeed the last few months, have seen a surge in projects reaching financial close.

“These will help support sector activity over the coming year.”

In total there are some 700 schools that have already opened, started on site, or reached financial close.