Victoria says the Federal Government is “holding a gun” to its head over education funding.

The Federal Government has demanded states sign the latest national agreement on schools funding.

Federal Education Minister Dan Tehan reportedly wrote to the Victorian Education Minister James Merlino to warn that the Commonwealth would not fund public and private schools in early 2019 unless the deal is signed by December 7.

Mr Merlino publicly released the letter this week.

“Should a bilateral agreement not be in place by this date, the Commonwealth will be unable to make the first 2019 payment to the relevant state or territory, including with respect to government schools,” the letter said.

“In these circumstances, I would seek your assurance that the Victorian Government would make up any shortfall experienced by the non-government sector to ensure that schools do not face undue financial stress.”

Mr Tehan says it is Victoria that is putting the funding negotiations at risk.

“The letter has been leaked for political purposes,” Mr Tehan said.

“No other state or territory minister has had a problem with the letter.

“I have held bilateral discussions with four of the states within the last 24 hours, with three more tomorrow [Friday].

“The only minister who has refused to set a time for discussions has been James Merlino. He wants to play politics.”

The Commonwealth was reportedly on the verge of signing school funding deals with all states before its recent decision to pour billions into the private sector.

“Only weeks ago, before the Liberal Party's internal chaos erupted, there was a different minister sitting in Mr Tehan's chair, so it is hardly surprising he hasn't got his head around the issues yet and doesn't understand where negotiations are up to,” Mr Merlino said in a statement.

“Now he is rashly demanding the states and territories immediately sign a deal, essentially holding a gun to the head of states and territories by inventing deadlines.

“If Mr Tehan were serious about education he would work with states and territories to provide fair funding for every child rather than come up with solutions that pit one sector against the other.”

The Victorian Government will soon enter caretaker mode ahead of its upcoming state election, and may not be in a position to sign a school funding deal before then.

Bilateral agreements are required for federal money to be given to state and non-government schools.

Victoria’s issues centre on the percentages that each government contributes to the Schooling Resource Standard (SRS) – which measure the cost of education for child regardless of where they are educated.

The Commonwealth has agreed to fund 20 per cent of the cost of public schools, and continue primarily funding private schools.

Victoria says it will lift its contribution to the SRS to 75 per cent, and with the Commonwealth’s pledge to fund 20 per cent of the SRS for state school students, there is still a 5 per cent shortfall that Victoria wants the Commonwealth to pick up.

NSW Education Minister Rob Stokes is not particularly happy with the new deal either, saying he wants every state school student to receive equal funding to that being offered to private school students.