Schools in Midland shires such as Staffordshire must accept reduced funding because they have few pupils from deprived areas, Ministers have warned.
Schools Minister Jacqui Smith, MP for Redditch in Worcestershire, was defending the Government's funding policy in the face of criticism from a number of MPs.
But Stafford MP David Kidney (Lab) said the Government's efforts to improve standards in schools were being undermined by an unfair funding system.
He was supported by fellow MPs taking part in a House of Commons debate, including Michael Fabricant (Con Lichfield), Bill Cash (Con Stone), Janet Dean (Lab Burton), Paul Farrelly (Lab Newcastle-under-Lyme), Brian Jenkins (Lab Tam-worth) and Tony Wright (Lab Cannock Chase).
The Government is to spend £3,381 per pupil in Staffordshire in 2006/07.
But this is ten per cent fewer than the national average, of £3,763 per pupil.
David Kidney (Lab Stafford) said: "We in Stafford-shire want to join with the Government and contribute significantly to an overall increase in standards of achievement.
"If only our education service had something approaching the average level of funding from the Government to pay for that effort.
"Instead, we consistently receive a level of funding that falls further behind the best-funded authorities."
But Ms Smith said: "It is because of differences in children and structures that there is differential funding for authorities.
"Our aim is to give all pupils an equal opportunity in life and, as the Member for Stafford acknowledges, pupils from more deprived backgrounds are likely to have additional educational needs and to require additional help if they are to have an equal chance to succeed.
"That is why the current - or old - formula funding system gives funding additional to the basic entitlement to authorities with a higher number of pupils from deprived backgrounds.
"Staffordshire has fewer pupils from deprived backgrounds than many other authorities, and that is a key reason for the difference."