A radical shake up is expected to see rural children receive more school funding for their education.
Government plans due to be unveiled aim to revamp the system of state education grants which means some rural schools currently receive £3,000 less per pupil than some city schools.
A new national funding rate will be set with more money available to top up grants, according to government sources quoted in the Sunday Telegraph.
The top up grants will be made available to schools with a high number of struggling pupils or children from poorer families, reported the newspaper.
It follows pressure on Chancellor George Osborne from more than 100 MPs who called for action to end the unfair situation of schools in rural areas receiving lower funding.
See also: Rural schools deserve 'fairer funding'
From 2017-18 the amount of money schools and local authorities get will be based on the characteristics of their pupils rather than purely historic calculations, said the Telegraph.
A government source told the paper: "This is a key part of our goal of extending opportunity and providing educational excellence, everywhere.
"It means bringing an end to a system that has become arbitrary and unfair. We'll ensure that there is a smooth transition, with a pace of change that is manageable for schools and local authorities.
"We are ensuring schools across England are funded fairly so that parents know all pupils, whatever their background and wherever they live in the country, have access to a good education."
The announcement is expected on Wednesday (25 November) when Mr Osborne is due to unveil his autumn statement and spending review.
At the moment, educational funding allocations to local authorities are based on decisions made at a local level more than a decade ago, said the Telegraph.
Under the current system, the ten best funded areas of England will receive an average grant of £6,297 per pupil this year, it said.
This compares to just £4,208 in the ten most poorly funded areas.
Earlier this autumn, North Yorkshire MP Rishi Sunak launched a campaign to get a better funding deal for rural schools.
A gathering of primary school head teachers and governors had gave their support to the fight to change the national funding formula.
They had put their names to a petition calling on the Government to change the ways funds are distributed.
Mr Sunak, who represents the Richmond constituency, said: "The current funding rules used by government to distribute cash to schools was out of date and unfair.
"It is based upon historic criteria that discriminates against rural areas.
"There can be no justification for a formula which gives schools in Bradford and Middlesbrough about £400 per pupil more than North Yorkshire."
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