The latest policy reversal on schools funding has come from the federal Labor Party - the driver of the multi-billion-dollar Gonski plan - which is now refusing to back legislation it introduced to slash university funding by $2.3 billion.

Former prime minister Julia Gillard announced in April that funding for the tertiary sector would be cut to give more funding to schools.

But, in a move that spells more uncertainty for the schools sector, the Opposition says it will vote against the cuts because the Government has not adopted the Gonski model in full.

Labor's higher education spokesman Kim Carr says the party had designed a six-year plan, but the Government is only going ahead with four.

"We're saying: 'Well, frankly, we don't have to ask the universities to meet those additional costs for a program the Government has gutted," he said.

"They've walked away from their commitments in terms of equity, they've walked away in terms of the commitments that the states have to maintain their level of funding, they've walked away from ensuring that we actually get better schools."

Deputy Greens leader Adam Bandt has welcomed the decision.

"Labor has seen sense and ... students and universities will be $2.3 billion dollars better off," he said.

"This is one education backflip that should be celebrated because students and universities will be the winners out of it."

Labor's move, which Education Minister Christopher Pyne has described as "deeply hypocritical", came under attack in Question Time from Treasurer Joe Hockey.

"Labor is going to oppose their own education cuts which they took to the last election," he told Parliament.

"That's pretty absurd."

The legislation is likely to be put to a vote in the Lower House today, but given Labor's about-face it is unlikely to pass the Senate until next July, when new Senators take their seats.

The Federal Government has been criticised over its handling of the schools policy, with Education Minister Christopher Pyne accused of breaking an election promise, when he announced that all Gonski deals would have to go back to the "drawing board".

Yesterday, Mr Pyne and Prime Minister Tony Abbott moved to quash concern by announcing that the Commonwealth would instead honour the funding promised in the deals struck by the previous Labor government.

It has also struck deals worth $1.2 billion with Queensland, Western Australia and the Northern Territory, which had not signed on to the Gonski package.