The Welsh Government told councils that school projects due to be built after 2014 will have to be revisited and resubmitted for approval after a sharp drop in UK capital funding.

Local authorities have submitted their plans for building new schools with the understanding that they would have to pick up 30% of the costs while the remainder would be paid by the Welsh Government.

Now they have been told to stump up half the building cost.

A handful of advanced projects scheduled to start before 2014 will escape cuts but councils will now have to revisit their programmes and decide what schemes to axe.

The move is huge blow to most big name contractors who have battled their way onto framework agreements and at best face a major delay in projects coming down the pipeline.

Figures from 20 of Wales’ 22 local authorities show they intended to build schools worth £1.3bn over the next three years.  Over 15 years, the authorities planned to spend £4.4bn.

A Welsh Government spokesperson said: “To be very clear, the Welsh Government’s 21st Century Schools programme has not been scrapped.

“This government is and remains committed to delivering schools that are fit for the 21st Century. This was never intended to be a ‘big bang’ approach, but a long-term programme of investment.”

Education Minister Leighton Andrews said: “We are still spending £415m over next few years on school buildings.

“What we are saying to local authorities though is for the programmes after 2014, they now need to go back to do more work on these, we need then to discuss what is the best way of spending the money we have.

He said: “There has been a sharp reduction in capital funding imposed on the Welsh Government – taken together a reduction of 40% will occur across the current funding period.

“Against that background, the board and the Welsh Government consider that authorities must be given the opportunity to review the timing and content of their planned investments so as to take the hard decisions early that will ensure funding goes to the delivery of excellence in education not the maintenance of buildings.”