Builders aiming for a slice of the 261-school build programme will be required to work to new design templates that are up to 15% smaller.

According to reports, Government officials hope to cut £7m from the average price of a school built under Labour’s BSF programme.

Classroom sizes will remain the same with savings coming from smaller atria, corridors, canteens and assembly halls.

The race to build new schools will be hotly contested with contractors Bam, Interserve, Laing O’Rourke, Morgan Sindall, Wates, Willmott Dixon and Galliford Try all rolling out standardised designs and offsite manufacture systems to slash building costs by up to a third.

Around 42 schools will be directly funded by Government with the remaining 219 schemes built using PFI.

Bids are expected to be called next month for the first three bundled contracts to build directly funded schools using the tighter design guidelines.

Job will be batched up into packages of 5-15 schools, worth £50m – £100m, with the first rounds of PFI schemes expected to be released early next year.

Peter Lauener, chief executive of the government’s Education Funding Agency, which has drawn up the template designs, told the Guardian: “More for less is the theme of what we are trying to do with education capital.”

“We are looking to come out with an average school building cost of under £14m compared to £21m under the BSF programme. It is not quite buy one, get one free. It is a three for two proposition.”