Tony Abbott and Christopher Pyne announce changes an hour before question time following week of criticism

The Abbott government has performed another U-turn on school funding, indicating it will substantially retain Labor’s Gonski-inspired model over the next four years.

The government has also found an extra $1.2bn to spend on schools in the hold-out jurisdictions of Queensland, Western Australian and the Northern Territory, but critics warn the federal government’s “no strings” approach allows the states to cut their own education budgets if they wish.

The announcement on Monday follows a week of criticism after the education minister, Christopher Pyne, said that the former government’s system would remain in place for only one year, 2014, and would then be replaced by a new yet-to-be devised model.

But the prime minister, Tony Abbott, said the student resource standard model – envisaged under the Gonski reforms – would be implemented over the next four years in the five jurisdictions that signed up to Labor’s system before the election. These jurisdictions – New South Wales, Victoria, South Australia, Tasmania and the Australian Capital Territory – were worried the amount of money allocated to them would be reduced as a result of the total funding pool being shared across all states and territories after 2014.

Half an hour before parliamentary question time, when the opposition was set to launch a full-scale attack over last week’s rethink, Abbott fronted the media to announce the government would reinstate the full $1.2bn earmarked for Queensland, Western Australian and the Northern Territory over the next four years. This amount was removed from the budget by the former Labor government before the election as a result of a failure to strike a deal with those three conservative-led states.

Pressed on whether the government would honour, to the letter, deals with existing signatories over the next four years, Abbott said: "That is certainly our intention. I suspect that New South Wales and Victoria will be happy to lose the Canberra command-and-control elements of those deals, but certainly the financial arrangements for the next four years, will be absolutely adhered to.”

Asked what model would apply in the non-signatory states, Abbott said:“What we said was that we would honour the agreements and we would match the offers and they were offers based on I think the student resources model, so that’s the one we’re proceeding with.”

Pyne, who last week said the Labor model was “unimplementable” and flagged the development of a new model to apply after next year, now says the Coalition has “no plan to alter the way that the model will be delivered in the signatory states into the future”.

He said he would merely proceed with the “in-built review” always envisaged to occur in 2015 "to make sure that the model is implemented effectively and we will adopt that".

Last week the government committed only to $230m to cover the non-signatory states for 2014. Abbott said Pyne had since negotiated with those three governments and secured an agreement to deliver the same federal funding that had originally been envisaged over the next four years.

Abbott said this would bring total extra federal funding, nationally over the next four years, to $2.8bn. Each state and territory would receive the same federal funding that had been earmarked over the budget cycle. It is not yet clear how the announcement will be funded, with savings set to be outlined in the budget update to be delivered this month by the treasurer, Joe Hockey.”

“We will implement a funding model that is national, fair and needs based while getting rid of the prescriptive command and control features that removed authority for schools from states, territories and the non-government sector,” Abbott said.

“The government will also honour funding promised to non-government representative bodies for four years including $55m to Catholic Education Commissions and $110m to the Association of Independent Schools.”

Asked to confirm the funding model would remain the same in the signatory states over the next four years, not just 2014, Pyne did not outline any changes to the calculation formula. He said the government would improve the model by removing “command and control” elements, which is essentially the level of federal regulation of state spending.

The government would also not proceed with federal inspectors visiting schools and a new national school performance institute - consistent with the Coalition’s pre-election criticism of those ideas.

The deals the previous Labor government struck with the states included conditions the states increased their own contribution to school funding, in return for the federal increase.

“There was conditionality attached to that of course; that won't apply to Western Australia, the Northern Territory and Queensland and we would expect the signatory states to keep the promises that they've made but at the end of the day that is a matter for those sovereign jurisdictions,” Pyne said.

Abbott said he would regard it as “very poor form” for the states to reduce their funding because of the extra federal funds flowing to them, but he did not want his government to “micromanage” the states or try to run public schools from Canberra.

The opposition leader, Bill Shorten, criticised the Abbott government for handing money to the states with no strings attached, saying it would allow state education budgets to be cut. He branded the Coalition as "educational vandals".

The Greens’ spokeswoman on schools, Penny Wright, argued the government was trying to paper over its betrayal of the nation’s children. She said the money must go hand in hand with the implementation of the needs-based Gonski model in all states.

“Shovelling no-strings-attached money at WA, NT and Queensland to paper over huge state government cuts to education is not Gonski. It will not give needy kids the chance they need to break through and reach their potential,” she said.

The Abbott government faced criticism from Coalition states of NSW and Victoria, which demanded the honouring of the deals signed before the election. The NSW Coalition education minister Adrian Piccoli last week accused the government of breaking its promises by keeping the model for only one year and feared public schools would lose out by the redistribution of funding beyond 2014.

NSW Premier Barry O’Farrell, who had previously criticised Pyne for dictating to the states through the media, issued a statement on Monday welcoming the government’s commitment.

“This announcement removes any uncertainty about funding for government and non-government schools across the state,” O’Farrell said.

“Tony Abbott's handling of this issue is a refreshing change to way Labor engaged with the states.”

Abbott denied the major states had forced him into a backflip, saying the government had been working calmly and methodically on the issue.

"Now that Minister Pyne have been working diligently with his state counterparts to get this in-principle national agreement we can put that other money in," Abbott said.

Of the $1.2 billion announced on Monday, Queensland will receive $794m, WA will receive $120m and the NT will receive $272m.

The opposition pursued the government in question time over its recent refusal to repeat pre-election pledges that no school in Australia would be worse off over the next four years. Pyne accused Shorten of failing to update his approach in light of the government’s announcement half an hour before question time.

Abbott said the government was delivering even more money in light of the restoration of the $1.2bn removed by Labor.

“The people can trust us in a way they could never trust old ‘Billion-Dollar Bill’ over there,” Abbott told parliament, before being forced to withdraw the nickname.

Shorten courted trouble by asking: “When will the prime minister stop lying?”

Speaker Bronwyn Bishop said she was “absolutely shocked” by the unparliamentary language and forced Shorten to withdraw. Shorten unsuccessfully moved a motion to suspend question time to censure the prime minister “for breaking his promises”.

At a media conference after question time, Shorten said the “hapless” government was panicking after the criticism of the past week, but still failed to clearly recommit to its pre-election pitch that no school would be worse off. The future of needs-based funding was still uncertain, he added.

“We just want the Coalition government to say we’ll keep our promises; we won’t break it; no school will be worse off as we said before the election,” Shorten said.

Pyne said the good news was that as a result of the extra $1.2bn for the non-signatory states, the government could say “that every school in Australia will get more funding and will not be worse off because of anything that the Commonwealth does”.

Pyne pointed out that under Labor and the Coalition it was still up to the states to distribute the money to public schools, suggesting it was impossible to give a firm guarantee for each school.

The independent and Catholic school sectors welcomed the announcement, including the confirmation “prescriptive” regulations would be removed.

The National Catholic Education Commission executive director Ross Fox said the government had provided much-needed certainty over the amount of funding and the model to be applied over the next four years.

But the Australian Education Union argued the government had done little to provide certainty for the nation’s schools.

“This is not a national agreement, this is Mr Abbott looking for a quick fix to take schools funding off the agenda, following a major public backlash over their attempts to break their unambiguous commitment to Gonski,” said the union’s deputy federal president, Correna Haythorpe.