DAVID CAMERON has preempted a new party row over schools by blocking a proposal to introduce local lotteries for school places.

The Tory leader has intervened over a key report on social justice that he commissioned from Iain Duncan Smith, one of his predecessors.

The move is bound to raise suspicions that Cameron feared the proposal, which was aimed at stopping middle-class parents gaining an “unfair” advantage over poorer families by buying houses close to good schools, would spark a new war over education within Tory ranks.

A draft copy of the study, from the party’s social justice policy group chaired by Duncan Smith, argues that introducing lotteries for school places would be fairer and give more chances to “disadvantaged” children of getting into a good school.

The draft also suggests children who qualify for free school meals could be given a £500 voucher - an “educational credit” - which they could choose to spend on extra tuition or music classes after school, practices common among middle-class families.

The report is one of several commissioned by Cameron to assist in forming new policies ahead of the next general election.

It states: “Middle-class parents . . . are able to move house to within the catchment areas of a good school and it has been estimated that house prices can rise up to 25% near a good school. This is the exercise of choice.

“The parents who have the least choice are those who are unable to afford to move houses to find a good school. These parents are often left with little choice but to send their children to a sub-standard school.

“Educational failure thus compounds the problems already faced by disadvantaged communities, resulting in low social mobility, poor aspiration and other social problems.

“We therefore propose that the government adopts a pilot scheme in one local LEA [local education authority] of giving credits to all parents so that they can take this credit to any school within the LEA. Parents would be allowed to choose any school within the LEA and all places should be allocated by lottery.”

Cameron - still smarting from the row in the party over grammar schools - decided, however, that the plan was “too far out”.

The report will also call for a big increase in alcohol taxes to improve treatment for the 2m people in Britain with serious drink problems. The “treatment tax” would raise £400m a year and be used to double the amount spent on helping problem drinkers and the 327,000 hard drug addicts.

Though the call for higher taxes on drink is only a recommendation, it is likely to prove controversial. Cameron ran into protests from Tories earlier this year when he endorsed a call to tax cheap flights and frequent flyers more heavily.

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