Schools sitting on large sums of unspent cash are being warned to use it or lose it.

The East Riding is the country's eighth-worst-funded education authority, but pleas for fairer funding will not be helped if schools are stashing cash, it is claimed.

East Riding Council clawed back surpluses from several schools last year to distribute to less-well-off schools.

The fresh claw-back warning comes as latest Government figures showed 51 schools in the county had "excessive balances" in 2007-08.

An excessive balance is defined as being more than eight per cent of the budget for primary schools and five per cent of the budget for secondary schools.

Overall, 136 East Riding schools were in surplus, with funds totalling £10m, while 18 were in deficit, to the value of £701,239.

The council's deputy director of children, family and adult services, Philip Holmes said: "We are the eighth-worst-funded authority and it doesn't help our case when we are asking for a fairer deal if there are schools sitting on excessive funds."

Schools that have good reason to carry forward funds, for example to do work in school holidays, must seek permission from the authority.

If schools fail to toe the line, they will be told to hand back money.

Last year, funds totalling £23,000 were clawed back from Burton Pidsea Primary, Skipsea Primary and Inmans Primary, Hedon.

The council clawed back £17,500 from Inmans Primary School after the 2007 floods disrupted spending plans.

Inmans headteacher Sally Morgan said: "It had been earmarked for remedial work, but we were waiting to see whether a new-build would go ahead.

"We didn't want to be using children's money on something that was going to be knocked down."

Inmans, which is now in line for a new-build, spent the £17,500 on outdoor play equipment instead.

But the council insisted the sum had to be paid back after the school failed to abide by strict time limits.

Ms Morgan said: "The council has done what it has been asked to do by the Government, but it has taken nothing into account. There was no leniency in the timing."

In Hull, 84 schools were in surplus, to the value of £7.6m, while 10 were in deficit, with debts of £1.2m.

Eighteen city schools had "excessive balances" totalling £540,365.

Judith Harwood, head of learning, leisure and achievement, said: "Hull City Council has had recycling arrangements in place for excess balances for the past five years.

"We were one of the first authorities to introduce these arrangements and both the council and schools have remained fully committed to ensure funding is used to meet the very real needs in the city."

Ms Harwood said the number of Hull schools with excessive balances has reduced.

She said: "For 2007-08, Hull's balances, both in terms of proportion of schools and amount, were half the national average and well below the norm for the Yorkshire and Humber region."