The 11 schools will receive $20 million in funding as part of round one of the school rebuilding program.

State Education Minister Bronwyn Pike said 28 building companies were ready to begin building at 243 government schools across the state new libraries, classrooms and multipurpose centres.

But a bunfight about how the program is being run continues at a Federal Government level with Gippsland MHR Darren Chester arguing the government needs to take a serious look at how its program of funding for new school buildings is running.

Federal Education Minister Julia Gillard has defended the government program, accusing the Coalition of not supporting "significant investment in our schools'' by voting against the plan in Parliament.

The Coalition has referred the program to the Auditor General due to concerns it won't deliver the promised economic benefits to local communities.

Under the program schools across the country have been allocated sums of money to build new classrooms, libraries and shared education buildings.

Mr Chester said builders from across the region had approached him expressing concerns they wouldn't be able to tender for projects in their own region.

"Builders are being told which school projects they can tender for and in many cases, they are being allocated schools two to three hours drive away,'' Mr Chester said.

Mr Chester also said many schools were concerned they could not use their funding for projects that they deemed to be their own priority.

"Schools are not being properly consulted or having enough say in the design and tender process,'' he said.

"Instead they are being told to accept a portable building or a template design which may not suit their needs and doesn't represent value for money.''

Mr Chester has called on Education Minister Julia Gillard to guarantee local building firms can tender for all local projects.

But Ms Gillard said the guidelines were developed to ensure the projects supported as many jobs in as many communities as quickly as possible.