Theresa May has prompted anger after reviving her flagship policy to expand grammar schools by handing them £50 million to increase places.

Lifting the ban on creating new grammar schools was a key part of last year’s Conservative manifesto – but the proposals were dropped in the wake of May’s election humiliation.

Under fresh plans by Education Secretary Damian Hinds, however, tens of millions of pounds are to be pumped into creating more places at selective state schools. 

The controversial move comes just days after the Office for Budget Responsibility said the cost for a planned 1% pay rise for teachers could only be met by heads “squeezing non-pay spending and by reducing the workforce”. 

A poll by the National Association of Head Teachers (NAHT) in March also showed more than a third of school heads have already cut teachers or teaching hours due to the Tories’ funding squeeze. 

School leaders, unions and the Labour Party have lined up to slam the decision to resurrect “the grammar school corpse” with “scarce” new money, claiming the model stoked inequality. 

Ministers, meanwhile, insist the move would give parents more choice and “make sure every family can access a good school”.

Hinds said: “By creating new schools where they are needed most and helping all great schools to grow, we can give parents greater choice in looking at schools that are right for their family – and give children of all backgrounds access to a world-class education.”

Existing rules allow grammars to take on more pupils that allow good state schools to expand.

Critics of selective education argue that these schools do not help improve social mobility.

Angela Rayner, Labour’s Shadow Education Secretary, said: “Just weeks after abandoning their own ‘guarantee’ to protect every school from cash cuts, the Tories have excluded the vast majority of schools from any extra funding for new places. Instead, there is just a handout for the handful of remaining grammars.

“Once again, the Government is pursuing its own vanity projects rather than following the evidence on what is best for pupils. They promised ‘schools that work for everyone’ but this policy just doesn’t live up to the label.

“The continued obsession with grammar schools will do nothing for the vast majority of children, and it is absurd for ministers to push ahead with plans to expand them when the evidence is clear that they do nothing to improve social mobility.”

Kevin Courtney, joint general secretary of the National Education Union, said: “The grammar school corpse has climbed out of its coffin once again despite evidence of the damage that selective education causes.

“Once prior attainment and pupil background is taken into account, research shows there is no overall attainment impact of grammar schools, either positive or negative.”

Grammars that want to take on more pupils will have to submit plans setting out what action they will take to boost the numbers of disadvantaged pupils they admit – similar to the access agreements signed by universities that want to charge £9,250 tuition fees.

If the £50 million pot was shared equally by the 163 grammar schools in England, each would receive just over £300,000.

It is understood that there will be sanctions if grammar schools do not meet the terms of their action plans.

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Geoff Barton, general secretary of the Association of School and College Leaders, said: “While there are many good selective schools, just as there are many good non-selective schools, the evidence is clear that expanding the number of selective places is likely to be damaging to social mobility.“

“High-ability students do just as well in good non-selective schools as they do in good grammar schools, and funding is therefore better spent on creating places in the former rather than the latter.

“This is important at any time but particularly so when funding is very tight as a result of government under-investment in the education system.“

Grammar School Heads’ Association chief executive, Jim Skinner, said: “We are very pleased that, like other good and outstanding schools, selective schools now have access to a fund to allow them to expand their premises.

“This is particularly important at a time when there are increasing numbers of pupils reaching secondary age and such high demand from parents for selective school places.

Figures show that as of March 2017, around 2.6% of grammar school pupils are on free school meals, compared to 14.1% across all school types.

Nick Brook, deputy general secretary of the National Association of Head Teachers, said: “The Government cannot point to a single piece of evidence that shows strong educational benefit of this misguided policy.

“While it may benefit a small minority, it will not close the gap between rich and poor pupils and if anything will increase the divide.”