Microsoft is under fire for the cost of its licences, with complaints from schools that costs are eating up already scarce resources.

Schools with large numbers of PCs are unhappy that they are unable to get the bigger discounts available to colleges and universities under the 'Campus' licence agreement.

Bob Blizzard, MP for Waveney in Suffolk, raised the issue in Parliament last week and called for the Government to take Microsoft to task on its licensing policy for schools.

"Microsoft is hoovering up school budgets and not being socially responsible. This is just putting [school] bills up and I don't think Microsoft should be enhancing its profits at the expense of schools," he told vnunet.com.

Kirkley High School in Blizzard's constituency estimates that it could halve the £15,000 a year it currently pays for software for its 250 PCs under the 'School Agreement' subscription licence, which came in on 1 July this year.

"We would like to invest further in IT but this is hindering our position," said a source at the school. "We feel we are locked in."

The school said that it has been refused a Campus licence six times, despite fulfilling one of the criteria, which is having a vocational centre for adult learners.

And a school in the north of England maintained that the £12,000 a year it pays for 330 PCs is forcing it to evaluate alternatives to Microsoft.

But David Burrows, head of education for Microsoft UK, insisted that schools still get a better deal than other institutions for software licences.

"It is still the best deal on Microsoft software if you are an academic customer," he said. "We will talk to any school either directly or through resellers about what is the most appropriate licensing scheme."

A spokeswoman for the Department for Education and Skills indicated that it is in contact with Microsoft, and is working on giving clear guidance to schools on the different licensing schemes.

"Officials are continuing their discussions with Microsoft to look at various ways of ensuring that schools are not disadvantaged by the licensing arrangements they are subject to compared with other educational establishments," she said.