SECONDARY schools in Hereford Education Action Zone will receive an extra £375,000 of Government cash to drive up standards - but only if their headteacher passes a leadership test.

The Government has unveiled plans to hand out "leadership incentive grants" of £125,000 in each of the next three years to 1,400 inner-city schools.

The cash will be on top of direct grants of £165,000, to be given to every secondary, as part of a £14.7bn education spending bonanza.

All Hereford's secondaries are in line for the money because of their Education Action Zone status. Schools in Excellence in Cities areas are also eligible.

It can be used to recruit and retain extra staff to take the burden off hard-pressed teachers and employ business managers to boost efficiency.

But ministers have insisted all schools will have to prove they have good leadership before the extra £375,000 is handed over.

That means governing bodies could be told they must sack poorly-performing headteachers before the grants are awarded.

Until now, the Government has only directly interfered to replace heads where a school has been judged to be failing by Ofsted.

"These are incentives to ratchet up leadership standards. They require a very clear commitment to improving standards, which could mean replacing a failing head," said a department for education spokesman.

The new grants are part of a four-pillared reform programme outlined by Education Secretary Estelle Morris today, following the comprehensive spending review.

There will be 300 "Advanced Schools" - not identified until the autumn - which will be allowed to take over the running of neighbouring, failing schools.

Thirty-three new City Academies will be set up, to be run by the private sector, and a total of 2,000 new specialist schools created by 2006.

"There is a national consensus that secondary standards must be transformed," Ms Morris told MPs.

"We now have the investment to do it. But I must make it absolutely clear this is money for radical reform. There are no blank cheques. This will not disappear into a black hole."

Teachers will be promised a set number of hours for preparation and marking and the number of school "sin bins" will be doubled to 2,000 to crack down on bad behaviour.

Spending on schools is set to rise by six per cent a year from £53.72bn in 2002/3 to £68.4bn in 2005/6.