Michael Gove is an "ideologically obsessed zealot" who has pushed through £400 million of cuts to funding for extra school places to help plug a financial black hole in the free schools project, it has been claimed.
The Education Secretary's decision to strip cash from the budget that pays for new schools and building expansions to help meet the £800 million shortfall in his flagship education programme is "nothing short of lunacy", a senior government source added.
They accused the Conservative Cabinet Minister of being willing to see children struggle for a classroom place so the department can "lavish" money on the free school "experiment".
The stinging attack is the latest furious coalition spat with the Department for Education at the heart of it.
Deputy Prime Minister Nick Clegg was earlier this week accused of "lying" over how plans to provide free school meals for infant school pupils would be funded.
A senior Government source said: "Michael Gove is so ideologically obsessed with his free school experiment, he's willing to see children struggle to get suitable school places.
"Everybody knows there's real pressure on school places at the moment and the Secretary of State for Education knows better than most. It is nothing short of lunacy to slash the amount of money available for new school places to lavish on free schools.
"Michael Gove was warned by the Schools Minister David Laws that this was a bad idea but the zealot pressed on anyway.
"The Conservatives are putting the needs of a handful of their pet-projects ahead of the requirements of the other 24,000 schools in the country."
Mr Gove reduced the basic need allocation by £400m - enough to provide around 30,000 new school places - to £2.35bn between 2015 and 2017 to help fund an overspend in the free schools budget of around £800m between 2013 and 2016, the source said.
They added: "Michael Gove is so dogmatic about free schools, he essentially places no spending restrictions on them at all. The free schools budget is out of control and the Secretary of State would rather sink another £800m into the black hole, rather than rein in spending.
" At a time when there is not much money around, this means they are benefiting at the expense of all the department's other policies. It's particularly damaging that even much-needed school places are in the firing line as a result."
Relations between the department and the Liberal Democrat leader's office have been stretched to breaking point for more than a year.
Earlier this week, Mr Gove's former special adviser Dominic Cummings claimed that Mr Clegg had repeatedly issued misleading statements about the funding of the free school meals scheme.
"Clegg has been lying about the announcement from the start to cover up the abuse of taxpayers' money for his personal ends. Gove was trying to safeguard taxpayers' money but Clegg ignored him," he said in a statement to the BBC's The World At One.
Mr Cummings has previously made direct attacks on the character of the Deputy Prime Minister, including claiming he is a self-obsessed "revolting character".
Mr Clegg hit back calling the former adviser a "slightly loopy" ideologue with "anger-management issues".
A spokesman for Mr Gove said: "The suggestion we are cutting money for new places in areas of need to pay for free schools where they are not needed is totally wrong.
"These claims pretend that money spent in free schools is not creating new places in areas of need. That is simply not true.
"From 2015, funding to councils for new school places will rise by more than £200 million a year. On top of this, investment in free schools will provide tens of thousands of new places in areas of need.
"Indeed the vast majority of free schools - more than seven in 10 - are in areas with a shortage of places. This investment in free schools is entirely in addition to the rising basic need funding for councils which we announced in December.
"Free schools are hugely popular with parents and are more likely to receive top ratings from Ofsted than council-run schools. So it is absolutely right that, where they are needed, new places are created in free schools."