Schools will be "obliged to close" because of reduced funding, according to documents prepared for the new Minister for Education Richard Bruton.

Mr Bruton’s briefing documents, published last night, say the adequacy of capitation funding for schools, intended to cover day-to day-running costs, is now a “critical issue”.

Department of Education officials say that, in the short-term, the funding shortfall is “potentially more risky than having large class sizes.

“The current reduced funding levels for all schools create a risk that some schools may not be able to cover critical costs – the absence of which could trigger school closure,” the documents say.

“A school that is unable to meet insurance or heat and light costs will be obliged to close regardless of class size.”

Capitation grants are intended to be spent on , for example, heating, cleaning, lighting, maintenance and the provision of teaching materials and resources.

It is estimated that an additional €40 million a year is needed to bring the grants back to pre-crisis levels.

Appropriate

The recently published programme for government committed the Fine Gael-Independent minority coalition to setting out the grants on a rolling, three-year basis with management given power to use the funds as they deem appropriate.

The programme also said no small rural schools will close “without the consent of the parents”.

The documents also reveal that funding available to build and upgrade third-level facilities to cope with rising student numbers is “woefully inadequate”.

While €110 million has been set aside for capital projects over five years, officials estimate the scale of demand for such projects is €4 billion.

Officials estimate that €1.5 billion is needed to meet planned growth in the number of students attending third level, to tackle sub-standard accommodation and bring student capacity up to international standards.

On the issue of redress costs for victims of child abuse and mistreatment, records show religious congregations have yet to pay €245 million in their share of costs.