Councils in Wales spend an average £604 less on each pupil compared to councils in England, new figures show.
The average spend per pupil in Wales was £5,595, while the average spend per pupil in England was £6,199.
Ceredigion council spent most, £6,340, and Vale of Glamorgan least, £5,001, making the difference, £1,339, higher than the Wales-England gap.
The assembly government said the gap was "exacerbated" by council reluctance to ensure money reached classrooms.
First Minister Carwyn Jones has pledged to make school funding a budget priority.
Budgeted figures for 2009-10 published last year showed that councils in Wales spent £527 less per pupil.
But new figures reveal that the picture is worse than feared.
They show that actual expenditure on schools in 2009-10 was less than budgeted, leaving a funding gap of £604 per pupil compared to England.
Teaching union the NASUWT said the situation was "appalling".
Dr Philip Dixon, director of the Association of Teachers and Lecturers Cymru (ATLC) said the figures marked a low point in education spending in Wales.
He said: "The sheer size of the gap is proof that schools in Wales are not receiving the funding of their counterparts over the border.
"Teachers, heads, parents and pupils can see what the lack of funding means on a daily basis with crumbling buildings and inadequate resources."
Some schools near the Wales-England border had already been comparing budgets ahead of the release of the assembly government statistics.
Figures show that Connah's Quay High, Flintshire, is worse off to the tune of £643 per pupil when compared with The Catholic High School, Chester, which is about 10 miles away. Meanwhile, Wrexham's Ysgol Clywedog is worse off by £606.
Gregg Dixon, head teacher at Connah's Quay, described the disparity as "shocking".
Meanwhile, his counterpart in Chester, John Murray, said if the situation was suddenly reversed, a £643 cut in funding per pupil at his 1,000-pupil school would mean redundancies and bigger class sizes.
"It's quite shocking when you see it in black and white," said Mr Dixon.
"Just in terms of level of staffing we are really stretched in everything we do in terms of teaching and support staff.
"With that additional funding we could do so much around that and be able to support learners more effectively."
Earlier this month it was confirmed that Welsh universities were losing out by almost £80m per year compared to their English counterparts.
On Tuesday the schools inspection body Estyn said standards in nearly a third of schools in Wales were not good enough.
Other statistics already published show education expenditure in Wales is budgeted to increase by 3.2% in 2010-11.
In Wales, 75% of the total gross schools budgeted expenditure is delegated directly to schools, with local authorities holding the rest centrally. In England that figure is 90%.
In Wales local authorities have been asked to hold back less, giving more to schools, according to BBC Wales education correspondent Ciaran Jenkins.
The Welsh Assembly Government said council education expenditure had increased by 81.3% or 6.1% per year on average since 1999.
"Even though it is getting more and more difficult to make direct statistical comparisons between spending in England and Wales, we accept that in general terms there is a gap (when looked at on a per pupil basis) in 2009/10," said a spokesperson.
"It is however important to note spending in Wales has held up well compared to many of our international competitors."
The spokesperson said the funding gap has been "exacerbated" by the reluctance of local authorities to ensure money reached the classroom.
"This is now being addressed as a direct result of pressure from the education minister. Local authorities have agreed to increase the amount of money spent by schools themselves from the 75% delegated in 20010-11 to 80% within two years, and to 85% within four years.
"This will increase the proportion of schools expenditure controlled at the front line."
The assembly government also suspected some of the funding gap could be accounted for by costs that are not included in the Welsh education system, such as private finance initiative and other privately financed schemes that exist in England.
It points to attempts to reduce bureaucracy in the education system "to make it more lean and effective."
Brian Lightman, general secretary of the Association of School and College Leaders (ASCL), said: "We are not having the funding to do the sorts of things that other schools in England are doing.
"We know about what's happening in terms of the results ...and the progress of our education service - we have enormous priorities," said Mr Lightman, a former head teacher of St Cyres School in Penarth, Vale of Glamorgan.
"We really need to be investing in it in order to ensure that we can do the best for the children of Wales.
"We have been saying for many years that this is having an effect and you can see it in many many different ways," Mr Lightman told BBC Radio Wales.
Chris Keates, general secretary of the NASUWT, said: "Constant pouring over figures and handwringing won't address the funding issues.
"The time has come to accept that a radical solution is needed."
"Maintaining the current large numbers of local authorities and increasing devolution of funds to schools will only exacerbate the situation."
Welsh Conservative education spokesman Paul Davies said: "Young people in Wales should not have to put up with lower standards of education than those just across the border in England."
Welsh Liberal Democrat education spokeswoman Jenny Randerson said: "This is yet more evidence that the Labour-Plaid government is failing our children."