The stoush between the state and federal governments looks set to intensify after Victorian Education Minister James Merlino accused Malcolm Turnbull of making "extraordinary threats" to withhold funding to state, independent and Catholic schools.

"We were not prepared to put funding for our schools and students at risk for 2018," he said.

Federal Education Minister Simon Birmingham hit back, accusing the Andrews government of "showing contempt" for students.

Just two weeks out from the end of the final school term, signing a short-term agreement with the federal government will provide funding certainty for Victorian schools for next year.

The interim agreement allows for $4.66 billion in Commonwealth funding to flow to Victorian schools in 2018, a $324 million increase from 2017 figures.

But Mr Merlino said he would continue to fight for a better school funding deal and the interim agreement was only for 2018.

"The big fight will be over the next 12 months as we negotiate the best long term deal for Victoria students," Mr Merlino said.

Most other Australian states have now signed up to the interim agreement. .

The South Australian government initially refused to sign the agreement, but recently backflipped after realising that not signing up would have meant that Commonwealth funds would stop flowing to schools.

In a strongly-worded letter to Mr Birmingham, Mr Merlino said it was "regrettable that the Commonwealth government has been unwilling to engage with states and territories in developing a more collaborative approach and equitable approach to school funding."

He said he was disappointed that the federal government had abandoned the final two years of Labor's former Gonski agreement and this would reduce funding to Australian schools by $17 billion over ten years.

Mr Birmingham said he welcomed Mr Merlino's decision to sign up to the agreement.

"I welcome the Andrews Labor Government signing on to receive our record and growing funding despite hypocritically calling for an old agreement they themselves have never fully committed funding for," he said.

He said that the Victorian Government spent less per student than any other state and the federal government's Gonski 2.0 legislation, which passed in June, would ensure they were held to account.

"The Andrews Labor Government is showing contempt for students and taxpayers."

The Education Council – which is made up of state and federal ministers – will meet on Friday and school funding will undoubtedly come up.

A panel chaired by Mr David Gonski AC is currently examining how school funding should be used to improve performance and student outcomes and a separate review is looking at how disadvantage is linked to funding. These two reviews will inform final funding arrangements.

Education experts remain divided on Gonski 2.0 but the plan has been welcomed by the independent school sector. Labor, the Australian Education Union and the Catholic sector have all slammed the new model.

The model will pump an extra $25.3 billion of federal funding into Australian schools over the next decade and was hailed by Prime Minister Malcolm Turnbull as the "the biggest reform in Commonwealth school funding ever".

Under the new formula, the federal government must provide 80 per cent of the resourcing standard to non-government schools and state governments are expected to fund 15 per cent.

When it comes to state schools, the federal government must provide 20 per cent of the resourcing standard and state governments must fund 75 per cent.

This benchmark will hit Victorian coffers the hardest because the state government funds public schools to 66 per cent of their appropriate standard, the country's lowest rate.