The Turnbull government could face a battle with the Senate, as well as a stoush with the states and territories, as it seeks to replace Labor's Gonski agreements with a new school funding model from 2018.
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School funding negotiations got off to a heated start on Friday with state ministers accusing the federal government of blindsiding them by releasing its funding analysis to the media before giving it to them.
State ministers from both sides of politics said they were angry at the way the process had been handled, a charge dismissed as "political chest-beating" by federal Education Minister Simon Birmingham.
"We're back to the bad old days, where we will be fighting regularly over school funding," NSW Education Minister Adrian Piccoli said after the meeting in Adelaide.
"This could potentially break the hearts of a lot of parents across Australia."
Acting Victorian education minister Jenny Mikakos said: "We are none the wiser on detail from the Commonwealth.
"We don't have funding certainty into the future."
The debate over school funding has focused attention on the Australian Education Act, passed by the Gillard government in 2013 to give legislative force to the Gonski Review's recommendations.
The Act sets base funding rates for Catholic and private schools as well as for public schools in so-called "participating states" such as NSW, South Australia and the ACT. It also locks in annual funding growth between 3 and 4.7 per cent for schools.
Any change to the Act would need to pass both houses of Parliament - a difficult task given the make-up of the Senate.
Mr Piccoli said the federal government had a "major problem" because school funding is included in legislation and it would get no "joy" from the Senate if it sought to change it.
Senate kingmaker Nick Xenophon indicated he would block any attempt to reduce school funding, saying he was a strong supporter of the Gonski reforms.
The six-year agreements struck between Labor and several states - containing big funding increases for 2018 and 2019 - are not contained in legislation, meaning the federal government is not bound to fund them in full.
But those familiar with the Act said the level of detail in it would hamper any efforts to overhaul the school funding system.
"Unless you are able to change the architecture in the Act, you are really just tinkering at the fringes," a source said.
"The base funding model and indexation levels are locked up in the Act - there is no sunset clause," another source said.
Senator Birmingham, who describes the current system as a "corruption" of David Gonski's vision for school funding, said the meeting had been more "constructive" than some of his counterparts had portrayed.
Senator Birmingham said federal funding for schools would rise from $16 billion in 2016 to $20 billion in 2020 and he wanted to ensure it was distributed fairly.
"I hope the states will work with us to achieve that and that the Senate will work with us to achieve that because otherwise we will simply be working within that Budget in an unfair arrangement, which is the last thing I want to see," he said.
The federal government plans to make a final proposal to the states in the first half of next year, he said.
Senator Birmingham this week released analysis showing Tasmania will receive 40 per cent more federal funding in 2017 than Western Australia for comparable schools with the same level of need.
West Australian Education Minister Peter Collier said the current arrangements were "fatally flawed" and unfairly discriminated against states that funded their schools well.
Opposition Leader Bill Shorten accused the government of preparing to take "a sledge hammer" to the school funding system and said more money was needed to improve education outcomes.
