Tony Blair appeared to disagree with a Birmingham headteacher yesterday who claimed personal finance should be made a compulsory part of the curriculum.

The Prime Minister was in the city visiting Bournville School and Sixth Form Centre, a specialist school in enterprise and business.

All pupils at Bournville are taught about money management from entry right through to the sixth form.

But asked whether financial capability should be made mandatory, Mr Blair said: "I don't think we should put further obligations on schools.

"What happens is, if a school wants to be a business and enterprise college, it can.

"The whole purpose of reforms is to build on success and let schools develop their own distinctive characters."

Speaking to The Birmingham Post, however, the school's head Ruth Harker said she believed it was vital that youngsters learned how to manage their finances.

"I think it should be compulsory. The fact is the youngsters engage in it. They get a great deal out of it."

Ms Harker said by the time pupils were in the sixth form they were managing their own university- style bank accounts to give them a taste of the financial challenges of higher education.

The Birmingham Post is calling on the Government to make personal finance compulsory to help youngsters cope with the increased cost of higher education and prevent debt in Britain spiralling out of control.

Business leaders including CBI director-general Sir Digby Jones have backed the call.

From next year the Government will allow universities to triple tuition fees to up to £3,000 annually.

At the same time, it wants half of all young people to go to university, up from 43 per cent now.

With personal debt in the UK already topping £1 trillion - £56 billion of it on credit cards - the potential for runaway debt is significant.

Some schools touch on money management in Personal, Social and Health Education, Citizenship and the new Enterprise Education subject.

But because personal finance is non-compulsory, many schools do not cover it at all.

During his visit, Mr Blair also defended the Government's costly city academy

programme to replace failing schools with privatelysponsored new centres.

The scheme has been criticised for allowing organisations, such as Christian groups, to gain an influence in education by putting up about £2 million of the £25 million new build cost.

The West Midlands will have three such schools by the end of the decade - two sponsored by Christian entrepreneur Bob Edmiston and one by West Bromwich-born businessman Eric Payne.

Mr Blair said: "Religious orders have been engaged in education for centuries. The important thing about the city academies is they have been very successfully tested.

"You have an outside sponsor who will come onside and help with the school. It will provide focused learning in schools."

Mr Blair praised Birmingham for its success in increasing the proportion of pupils gaining the benchmark five or more GCSE passes at A* to C grades. He claimed it was an example of Labour's biggest success since coming to power.