EDUCATION Secretary David Blunkett today admitted City of York Council is locked in a "Catch-22" predicament over its review of the way secondary school places are allocated.

In an exclusive interview with the Evening Press, Mr Blunkett said he viewed with "great sympathy" the problems the council was facing in its bid to replace the current two-tier system of admissions - inherited from North Yorkshire County Council - with a new, single policy.

Education chiefs have denied the proposed changes are anything to do with their struggle to fill hundreds of empty places in a handful of York's secondary schools.

Angry parents are threatening rebellion against moves they say will limit the number of children going to high-flying schools while sending more to schools with poorer results just to fill empty places.

But Mr Blunkett, who spoke at a special Education Sunday service in York Minster yesterday, today gave tacit support to the council.

He said while the Government's "top priority was to raise standards" he admitted local education authorities like York, with high surplus places, also had an obligation to "maximise the effective use of resources".

He said: "There are always restrictions on popular schools. Where demand exceeds supply there is a problem in terms of admissions.

"The question that has to be addressed is: 'are there places already available and can York utilise those without damaging the survival of other schools'?"

Mr Blunkett revealed the Government would soon be introducing new guidance on admissions.

He said: "We will be asking authorities to be as sensitive as possible to the preferences and demands of parents whilst trying to act in the best interests of the wider community.''

Mr Blunkett was unable to shed any light on whether the plan to merge Canon Lee and Queen Anne schools will get his backing.

But with the city council's final response to objections to the merger due to land on Mr Blunkett's desk over the weekend the Secretary of State said he was aware of the "strong feelings".

But Mr Blunkett did offer crumbs of comfort to staff at the doomed York-based Funding Agency for Schools.

He said negotiations were already under way to re-deploy their skills when it closes in 1999.

The days of the Skeldergate-based agency, which employs some 200 people, have been numbered since Labour pledged to move away from the Tories' grant maintained schools.

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