The review into future school building work will not be completed until the end of the year, Building reported.
Senior industry figures told Building this could mean it will be the end of 2011 before contracts can be awarded on a scaled-back programme.
However, the government expects to set the levels of future funding in time for the Comprehensive Spending Review in October.
The review, being led by Sebastian James of electronics retailer DSG International, will “overhaul how capital is allocated and targeted”, according to the Department for Education.
The review panel includes Sir John Egan and Kevin Grace, the director of property services at Tesco, which is known for its tough approach to its supply chain.
Meanwhile, delivery body Partnership for Schools insisted it remained at the heart of the Government’s schools capital plans, Construction News reported.
Chief executive Tim Byles said: “The review of schools capital will help ensure that the way in which future spending on school buildings and facilities is delivered matches the new Government’s priorities.
But Byles ruled out compensating bidders for abandoned BSF schemes. “Government has said it will honour commitments where financial close has been reached. In a competitive world one bids at one’s own risk.”
Fourteen schemes had reached preferred bidder status - the last phase before financial close – and these scheme have had all but their sample schools scrapped.
PfS is leading a review of the sample schools and Byles said it would decide within four weeks which would be given the go-ahead.
But Nicholas Taylor, a partner at law firm Davies Arnold Cooper, urged the industry to push for compensation. “I believe the industry will come together and put pressure on the Government to make a pot available.
“If the Government is not proposing to make a pot available, then the contractors will have to try to make them think again.”
But some contractors tried to draw positives from the announcement. One told Construction News: “There is no point in stamping your feet; we have to be constructive and find the most workable solution from it. I don’t think anyone will be rushing into legal action.”