Last week, Federal Education Minister Julia Gillard met with more than 200 Victorian school principals, including about 60 from Casey.

La Trobe MP Jason Wood said he was outraged Berwick Lodge Primary School had been directed by the State Government to use $3 million of Federal Government funding to build a gymnasium - despite that fact it already have one.

The funding is part of the Rudd Government's $14.7 billion Education Revolution program.

"Berwick Lodge Primary School has little to smile about because - instead of having the opportunity of using this $3 million for the construction of a new library and six classrooms, as planned - we have the crazy situation where the Department of Education and Early Childhood Development has told the school that it needs to use this funding to build a gymnasium," Mr Wood said.

"You may think that is fair enough, but the school already has a gymnasium and it does not want another one."

Principal Henry Grossek said State Government directives outlining building options were not wanted or needed.

He welcomed the Government's decision to now allow schools more choice over what the funding could be used for.

"The State Government's template designs are optional and schools cannot be prevented from submitting an application of their choice. We have won our fight."

A Department of Education and Early Childhood Development spokeswoman said Berwick Lodge Primary School's plans were being considered for round 3 BER funding (due for submission in early July), and would be subject to Federal Government approval.

The spokeswoman said Berwick Lodge could seek approval to construct the facilities it wanted, but that schools still needed to follow design guidelines unless the design won pre-approval.

Schools that did not want to use the Government's guidelines had to prove their designs were appropriate and that the building process could be achieved within a set timeframe.