Labour has called the free school project a waste of money and a "pet" political project.

Ahead of next year's general election, the party was granted an urgent question in Parliament following concerns over funding, with shadow education secretary Tristram Hunt asking ministers if they were spending up to £400 million to fill a black hole.

Addressing MPs, Mr Hunt said: "The coalition - both parts - has raided the schools budget to pay for petty political projects", adding free schools had been "underperforming" under Michael Gove's leadership.

Mr Gove responded by saying educational standards are improving as a result of the introduction of free schools and there was no longer a shortage of places across England.

There are now more than 170 free schools in England. Although they receive direct funding from the Department for Education, they are independent from councils and set up by parents, teachers, religious groups and academy chains.

However, problems have surfaced in the coalition with Liberal Democrat sources saying free school funding is costing 30,000 local authority school places. The Lib Dems originally supported the creation of free schools, but growing tensions between the two parties are now evident.

According to sources in Nick Clegg's office, at the end of 2014, Mr Gove stopped the Lib Dem schools minister David Laws taking £400 million from the Basic Need Budget for 2015-17 so that a projected £800 million overspend in the free school budget could be covered.

Westminster sources close to Mr Gove said the Basic Need Budget would still rise and argued that expansion of free schools would create more school places overall.

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