Schools owe pounds 2m and debt expected to keep on rising.
A CARDIFF school has topped the list of the most debt-ridden schools in Wales, amassing a deficit of hundreds of thousands of pounds.
Llanedeyrn High School has racked up debts of pounds 603,000 in 2008/09, leading education experts to condemn the Welsh Assembly Government's funding policy.
In total, schools throughout the region have negative reserves of more than pounds 2m. Following suggestions in a Wales Audit Office Report that the WAG's budget may lose pounds 3bn over three years, it is predicted the situation will only worsen.
Teaching unions have now spoken of their fears for the future of Welsh education amid the prospect of imminent cuts made by Westminster.
The five schools with the biggest deficits in South Wales are Llanedeyrn High School, Cardiff (-pounds 603,000); The Coedylan Comprehensive School (known as Pontypridd High School since 2007) Rhondda Cynon Taff (-pounds 282,000); Cantonian High School, Cardiff (-pounds 273,000); Aberdare Boys'' School, Rhondda Cynon Taff (-pounds 163,000); and Bishop of Llandaff Church In Wales High School, Cardiff (-pounds 146,000). Experts say the effect of such crippling deficits has resulted in childrens' education suffering greatly.
Dozens of teaching staff and support staff have already been cut and class sizes have increased as a result.
Under the Local Management of Schools regulations, funding is distributed to schools by their local councils based on a locally-agreed formula of which at least 70% is based on pupil numbers.
Schools are then responsible for managing their own budgets but the level of reserves held from year to year depends on a number of different factors, including an individual school's particular plans for spending.
Over the past few years, a significant reduction in pupil numbers has led to decreases in funding and so many schools have recorded deficit budgets.
For this reason, experts believe individual schools cannot be solely blamed for falling deeply into the red.
Neil Foden, executive member for Wales for the teaching union, NUT Cymru, said the blame instead ultimately lies with the WAG.
"It clearly does not spend enough on education in Wales and the funding gap between England is just getting larger. It now spends pounds 527 less per pupil than the English government does compared to pounds 496 the year before.
"This combined with the fact the amount of financial expertise in schools to run a budget is also limited means WAG should take some responsibility."
Anna Brychan, director of NAHT Cymru, said her members were concerned with the state of Welsh schools' finances and worried about their immediate future.
"We know that painful cuts are coming - every party fighting the UK general election has repeatedly told us so. Despite reassurances about protecting front line services, our members are desperately concerned about what this may mean for schools and pupils in Wales. We're starting from a low base and are worried about falling further behind."
Dr Phil Dixon, director of ATL Cymru, said: "The bottom line is we have been seriously underfunded for far too long.
"It's had a great impact on childrens' education and this is quite evident when you see how far behind Wales trails England in terms of GCSE results."
A WAG spokeswoman defended the amount of funding it gave to local authorities but added it was aware of the increasing demand.
"In Wales spending on education has never been higher having increased by 71% since 1999-2000, but we recognise the importance of getting more education funding to the front lines.
"We are taking steps to address this, and have announced a major independent review of how education funding in Wales is allocated to schools, colleges and universities. The first stage of the review is currently being finalised.
"The First Minister and Education Minister have also made a significant commitment to education, promising to increase spending by 1% above the block grant we receive from the UK Government from the 2011-12 financial year.
"Financial balances whether positive or negative are a matter for individual schools and their local education authorities."
A spokeswoman for Cardiff Council said the authority was making every effort to support its struggling schools.
"The council has an agreed protocol with schools within which schools who find themselves in financial difficulties are able to balance their budget over four financial years. This medium term approach allows schools to manage these financial challenges more strategically and enable those schools to minimise any potential short term negative impact on learners.
"For some schools in Cardiff, the challenge of falls in pupil numbers is exacerbated by local pupils moving to other schools where there are surplus places. The council is starting to manage this with significant school reorganisation proposals which include an investment programme in school buildings in excess of pounds 150m."
SOUTH WALES'' 10 MOST IN DEBT SCHOOLS Llanedeyrn High School, Cardiff (-pounds 603,000) The Coedylan Comprehensive School (now Pontypridd High School), Rhondda Cynon Taff (-pounds 282,000) Cantonian High School, Cardiff (-pounds 273,000) Aberdare Boys' School, Rhondda Cynon Taff (-pounds 163,000) The Bishop of Llandaff CIW High School, Cardiff (-pounds 146,000) St Cyres Comprehensive School, Vale of Glamorgan (-pounds 136,000) Pontllanfraith Comprehensive School, Caerphilly (-pounds 131,000) Treorchy Primary School, Rhondda Cynon Taff (-pounds 116,000) Barry Comprehensive School, Vale of Glamorgan (-pounds 112,000) The Hollies Special School, Cardiff (-pounds 104,000)
Rising school debts have led to condemnation of the Welsh Assembly Government's funding policy