If money is available, he said, it would be better spent on direct grants and loans to students.

Councils should be able to make claims quickly, within the coming weeks, and will receive funding through a direct grant.

For those whose income fell below this level, the Government would make direct grants in the amount of the difference.

The plan would also provide $100 million in direct grants for poor communities seeking to improve their water supply systems.

In addition a large part of spending is provided by direct grants to such authorities.

Poor students got direct grants, which did not have to be paid back.

But it offered them much larger direct grants than the Government has the money to deliver.

Bringing it back, perhaps through direct grants, would require raising the national sales tax rate to 21 percent.

An additional $200 million a year would be available as direct grants.

But city officials say they would prefer that the money came to them in direct grants, rather than through the state.