MP Peter Luff today said he was confident the threat of legal action against the Government has forced a re-think over the funding of Worcestershire schools.

Local Conservative MPs and three Worcestershire headteachers had a "very positive" meeting with Local Government Minister Dr Alan Whitehead at Westminster last night.

The talks were arranged after the Government indicated it would not repeat last year's payment of an extra £1.35m to the county's hard-pressed schools on top of the education spending settlement.

This prompted heads to threaten to take the Government to the High Court on human rights grounds.

"The threat of legal action has prompted a much more realistic assessment of Worcestershire's needs by the Government," said Mr Luff speaking after the meeting.

"We must carry on arguing our case vigorously and clearly, but I'm more optimistic than I was that real progress might be made."

The headteachers who visited the Commons - Cledwyn Davies, from Droitwich High, Valerie Holland, of Cranham Primary, in Worcester, and Martin Allen, of St George's CE School, in Redditch - said this did not mean the threat of legal action would be called off.

They are already in the process of raising £3,500 for an initial consultation with a London barrister. This will be paid for by the heads and their governors.

If the QC suggests they have a case, they plan to try and raise a further £20,000 - 25p for each of 80,000 children in Worcestershire.

Cledwyn Davies, who is also chairman of the Worcestershire Headteachers' Forum, said they were seeking a greater sum than last year's additional payment of £1.35m.

"A similar sum isn't good enough when you consider inflation," he said. "The county needs an extra £2.5m to £3m to make us very happy."

Any additional payment is likely to be achieved by increasing the amount payable under the current funding formula - rather than the top-up payment made last year.

This will be the last year of controversy as the MPs and teachers were assured a new formula will be introduced in 2003.

Worcester MP Mike Foster said he and Redditch MP Jacqui Smith had focused throughout on achieving a better education settlement, rather than a repeat of last year's payment.

"We've made a strong case from the outset and put that to Local Government Secretary Stephen Byers two weeks' ago in a very constructive meeting," he said today.

"The threat of legal action and the complaints of some of our Conservative colleagues have just been a distraction, although not to us."