Bristol's primary schools revolution is in doubt because the Government has refused to hand over £12 million towards the citywide project.

The Department for Children, Schools and Families has rejected the city council's bid for funding under the Primary Capital Programme.

It has told the authority to rethink its strategy for improving educational performance for children aged four to 11.

The news throws into uncertainty the Primary Schools Review passed by the Labour-run cabinet last month, which drew up plans for £46m of buildings and refurbishments over three years.

It will also cast a different light on the call-in panel hearing next Tuesday over the cabinet's decision to shut three schools as part of the review.

Opposition councillors and those fighting some of the review proposals say the Government response proves the review has been bungled. But the council insists it is on track with its plans and will get the money soon. It says yesterday's announcement need not delay any of its schemes.

Bristol is one of 15 out of 148 local authorities to be told further work is needed on their strategies before funding can be released.

A DCSF spokesman said: "Strategies in this category had specific issues that must be addressed before funding can be confirmed. The Department is providing tailored professional advice and support to help them improve their strategies."

Bristol will receive a detailed written critique of its strategy by the end of this month and will be invited to re-submit its strategy by the end of January.

Council spokeswoman Katharine de Lisle said: "The announcement by the DCSF does not put Bristol City Council's plans to rebuild and refurbish primary schools into doubt, as we are confident that having now gone through a lengthy process to confirm our strategy, we can resubmit our application in January and access funding in April, as anticipated.

"The DCSF have not asked us to 'go back to the drawing board', but to confirm and expand the context of the primary review proposals. Much of this work has been completed in the six months since the original submission. We now know our proposals are on track to generate a reduction in surplus places to below nine per cent and funding in primary schools has increased by £15 per pupil per year, which provides good value for money."

Forty-one councils were given final approval by Schools Minister Jim Knight and 92 others, including South Gloucestershire, North Somerset and Bath & North East Somerset, saw their strategies approved provisionally.

Mr Knight said: "We have rigorously assessed every local authority's plans over the last few months. Nine out of 10 local authorities have a clear, well-developed idea of how to use the programme to raise education performance, particularly in deprived areas, and put schools at the heart of their communities. We want every area to benefit from this investment – and expect every local authority to have a robust, approved plan in place shortly."

The primary review based its priorities for investment on a range of factors including reducing surplus places and improving value for money as well as creating schools fit for the 21st century to help drive up results.

But the Conservatives disagreed, saying the council should follow the advice of a local DCSF official and shut down the worst-performing schools.

The review does propose to close three small primaries, St George's C of E, St Pius X Catholic Primary and Stockwood Green, but they are not those with the lowest results.

That decision has been called in by Conservative leader Richard Eddy and Stockwood councillor Jay Jethwa, who say there has been poor consultation and failure to take advice. A panel of councillors meets on Tuesday.

Tory leader Councillor Richard Eddy said: "The response from the DCSF demonstrates the primary review was fundamentally flawed from the outset.

"Contrary to the requirements of the Secretary of State, the authority's proposals will destroy choice and limit diversity of provision. The policy has been the product of muddled thinking.

"Any confidence that parents and pupils may have had in the Labour administration has proved to be practically worthless judging by this announcement.

"Cabinet councillor Peter Hammond and his colleagues need to show some humility and recognise the mistakes made in the review process. They must seize this opportunity to work with outside professionals to develop a robust and acceptable primary review strategy.

"The revised model must command cross-party support and look again at the planned closures of St George, St Pius X and Stockwood Green Primary."

Liberal Democrat leader Councillor Barbara Janke said: "This is clearly a major setback for the city. Many schools were anxious and uncertain about their future already, and the news the council has bungled the primary review will only add to those fears.

"The Government's criticisms of Bristol's submission are damning. At a time when the council is undergoing internal restructuring it would appear the Labour administration and officers have perhaps taken their eyes off the ball. Concern at attainment is Bristol's schools is well known and it is breathtaking the strategy failed to address this issue.

"The council needs to start concentrating on the issues that matter to people in Bristol."

Clare Gundry, head of closure-threatened St George's Church of England Primary, said: "It proves the Conservatives were right to call in the decision."

The council says the need to re-submit the strategy will not hold up any developments.

Ms de Lisle said: "Projects included in phase one of the review are going ahead as planned.

"Phase two of the Bristol project will begin in 2010 and again, this funding announcement will not lead to delays. However, with such a broad range of projects and so many variables – including applications for planning permission, land sales, or difficulties during building work – there is always likely to be movement to project timings."