Half of the money secured to rebuild crumbling schools in Birmingham is to come from the private sector, locking the local education authority into a hefty 25-year "mortgage" repayment.
The #1 billion refurbishment plan is to be delivered under Public Finance Initiative arrangements - the Government's preferred method of public sector capital investment.
The controversial initiative, used to build new hospitals including Birmingham's #589 million University Hospital Birmingham scheme, has been criticised by unions as not delivering value for money.
Earlier this month Birmingham City Council announced it had secured #1 billion to refurbish or rebuild all 76 of Birmingham's secondaries over the next 15 years.
The authority has now revealed that the scheme would be delivered as a "50/50 split between PFI credit and traditional funding".
"We expect to be in line with that national trend but the exact proportions are going to be negotiated as the projects are defined over the next 12 months," said a spokesman.
The interest rate the authority will be paying on the #500 million is to be ironed out with contractors lining up to bid for the lucrative deal.
Experts, however, say it is likely to be set "a few points" above base rate, meaning the authority will have to pay back millions extra in interest.
Kate McLeod, regional officer for the public sector union Unison, said: "We acknowledge that services need investment. The issue is how much does that investment cost? Quite often with PFI the headline figure is not the actual cost which means for many years we have to pay the costs."
Bill Anderson, deputy general secretary of the Birmingham NUT, said: "There is a lot of evidence showing that PFI is not value for money.
"You have examples of poorly-built schools and poorly-built hospitals. It is mortgaging the future and it is not us paying, but our children and grandchildren who will pay for it."
Contractors recruited to deliver Birmingham's rebuild will design the schools and are likely to take over maintenance.
"We are moving towards the time when if we are not careful we find commercial interests are not only directing the infrastructure of education but taking a direct commercial interest in what is taught as well," added Mr Anderson.
However, Stephen Kenny, a PFI expert with Birmingham-based law firm Wragge and Co, claimed: "The overall costs are lower because you are looking for efficiencies and economies and better managed assets.
"Contractors have to bid in competition to get the deal and you only go with it if you can prove PFI is better value for money than doing it yourself."
