The government is in talks with private boarding schools about the possibility of them receiving vulnerable children, including those in care.

The Department for Education and Skills has formed a working group including representatives from the boarding school sector and councils and a discussion paper is likely to be published in the autumn.

Boarding schools believe the government is interested in the idea because it could be cheaper than residential care, help compensate for a national shortage of foster carers and boost educational achievement.

However, there is scepticism among charities and council leaders that boarding schools will be equipped for vulnerable children.

John Coughlan, chair of the Association of Directors of Social Services children and families committee, said: "The idea may have some merit but needs careful consideration. It needs to look at the needs of the children rather than the needs of the sector."

Sally Bamsey, manager of the children's residential care unit at the National Children's Bureau, said: "Most children in care are there because they have been abused and neglected. Will boarding schools be ready to respond to the emotional needs of children in public care?"