The State Government announced the capital grants funding yesterday, to rebuild and upgrade more than 500 Catholic schools across Victoria

Catholic Education Office Sandhurst chief executive Denis Higgins said the interim funding would allay fears schools would have to cut programs or raise fees next year to meet increased running costs.

“We are every pleased the government has listened and we look forward to energetic discussion with the government about the next agreement for funding for the 2010 to 2103 period,’’ he said.

“This funding will enable many schools to prioritise their budgets and at the moment salary is the biggest need.’’

Mr Higgins said the funding would also allow other programs including counsellors for special needs students to continue until the next funding agreement was finalised.

Last month the Catholic Education Commission agreed on staff pay increases for Catholic teachers to give them parity with their state counterparts, but this meant Catholic schools already had to find $24 million extra in back payment from May.

Mr Higgins said almost every school in the Sandhurst diocese would qualify for the capital works funding because they all qualified under the government’s needy schools criteria.

He said the announcement was the result of successful lobbying by local members of parliament, both government and opposition, and the continued support of parents’ groups and school councils.

Education Minister Bronwyn Pike said the funding indicated how the State Government recognised the importance Catholic schools played in Victoria’s education system, educating more than 180,000 students.

“That recognition is evident through the 72 per cent increase in Catholic school funding we’ve provided since 1999, and the historic four-year, $1 billion funding agreement our government struck with the Catholic sector in 2006,’’ she said.