A group of England's lowest-funded local education authorities has had its bid for extra funding turned down by the Education Secretary Michael Gove.
Schools run by members of the group, known as f40, get up to £600 less in basic grant per pupil than the local council average.
They had asked for £99m to share between them until a new national funding formula is introduced in 2015.
Turning them down, Mr Gove blamed the economic situation.
The group heard the decision just days before Mr Gove announced approval for about 100 new free schools.
In a letter to the group's chairman, Councillor Ivan Ould, Mr Gove said: "I am very sympathetic to the case you and your colleagues put forward.
"I agree the current system for funding schools is out of date and complex, and that is why I have committed to introducing a new National Funding Formula."
He continued: "It is important that we move to a new formula gradually and at a pace which schools can manage."
He said it was important to consider any changes carefully and get the new formula right.
He added that because of the "reality of the current economic situation" any extra funds would have had to have come from elsewhere in the funding system.
The government has indicated the new funding formula will not be introduced during the current parliament.
But group secretary Doug Allen said what made the news particularly difficult was coverage of grants to free schools.
"I read recently that Mr Gove is giving £2m to a school in Beccles for a small number of pupils.
"You have to question where is the sense in that, where is all that extra money coming from?"
He added that the campaign for fairer funding had been going on for 20 years under governments of all descriptions.
But this was the first time that the group felt they had won the argument, he said.
The group was asked specifically by Mr Gove in March to produce some financial modelling to show how the issue could be addressed.
He highlighted the disparities in funding using the example of schools close to each other in Leicester City and Leicestershire.
"You could be living in one street and go to a school in Leicestershire that gets £800 per pupil less than the one someone else in that street goes to because it is a Leicester city school."
He said similar discrepancies existed between the East Riding of Yorkshire and Hull, and Nottingham and Nottinghamshire.