The government has discovered that "significant" numbers of schools are flouting admissions laws, with some state schools demanding parents promise to pay hundreds of pounds to secure their child a place.
Ministers said they were shocked to discover schools in three local authorities breaking admissions rules by interviewing pupils, demanding information about parents' professions and incomes, and giving priority to children whose parents attended the school while ignoring children in care.
Some demanded parents donate money as a condition of entry and one required them to fill in a standing order form with their application.
Ed Balls, the children's secretary, said abuse of the system was disproportionately occurring in faith schools and others which control their own admissions. Ministers met Roman Catholic, Anglican and Jewish leaders this week to express concerns. The evidence was so shocking, ministers said, that at one point they considered suspending this year's offers of school places pending a full inquiry.
Balls said some schools were charging hundreds of pounds. "Any school that has asked parents to make a financial contribution as a condition of admission must make clear to those parents now that such a payment is not mandatory," he said. The Guardian has learned of schools making illegal charges in Barnet, north London.
The government published official admissions data yesterday showing that nearly 20% of pupils failed to get their first choice this year, while 95.5% got one of their preferred schools.
The figures revealed that more than 25,000 of the 560,000 pupils applying this year have been placed in a school they did not apply to.
Opposition MPs accused ministers of attempting to deflect attention from the figures by announcing the findings of their study into the admissions code.
Balls ordered officials to examine the admissions criteria for 570 primary and secondary schools in three local authorities - Northamptonshire, Manchester and Barnet - in January after the schools' adjudicator revealed that he had investigated 79 schools for breaking the admissions code introduced 12 months ago.
A "significant minority" and a "disproportionately" high number of faith schools were breaking the law, Balls said, adding that there was no reason to suspect that the situation was not the same in the 140 other local authorities.
Last night Barnet council confirmed that 38 schools were being investigated including Hasmonean primary, a Jewish school, which had been charging a £50 "admission fee". Three other Jewish primaries and a Roman Catholic one were being investigated for charging fees. A government source said there were also concerns about secondary schools.
Manchester council confirmed that 12 primaries and six secondaries in its area are being investigated, but denied that they had been charging parents.
Councils are to get fresh powers to scrutinise the admissions procedures of faith and foundation schools and academies which control their applications procedures. Jim Knight, the schools minister, said: "The fact that there are some things that are singled out in primary legislation that are still going on is shocking."
Teachers' leaders warned that schools requiring payments could be sued by parents who had paid in the past.
Nick Gibb, the shadow schools minister, said: "Ed Balls is distracting people from the real issue - that one in five children are being refused their first choice of secondary school."
The Catholic Education Service said: "We urge government and others not to jump to premature conclusions based on a rudimentary look at a small sample of unverified admissions arrangements."
