CANBERRA, Dec 2  - The Federal Government has backed down on schools funding after a row with a majority of the states and territories. It will now provide funding of $2.8 billion over four years to all the states and territories, after deciding to bring back $1.2 billion put into consolidated revenue by the former Labor government. Prime Minister Tony Abbott said the Coalition had secured an in-principle agreement with Queensland, Northern Territory and Western Australia that would allow a national funding system to operate. "Given that we now have a fair and national deal, the government will put the $1.2 billion that Labor took out back into schools funding over the next four years," he told reporters in Canberra on Monday. "There will be full funding certainty over the next four years." Last week, the Coalition raised the ire of states that had sealed deals with the former government under the so-called Gonski system. It announced it would only honour agreements for the 2014 school year and review the system for 2015. NSW, Victoria, South Australia, Tasmania and the ACT were angered that they would miss out on what was promised. Queensland, Western Australia and the Northern Territory had held out on doing any deals with Labor, but will now get the $1.2 billion earmarked by Labor for their funding. The Abbott Government will also honour funding promised to non-government representative bodies for four years including $55 million to Catholic Education Commissions and $110 million to the Association of Independent Schools. Abbott said the decision meant the government was "more than keeping our commitments". "We want to keep our commitments in spirit as well as in letter," he said. Funding for the Gonski signatory states would be distributed in the same way as previously planned. But conditions placed on NSW, Tasmania, South Australia, Victoria and the ACT won't apply to the other three states. Education Minister Christopher Pyne said the government would amend the Australian Education Act in 2014 to "dismantle the regulation and red tape that made the model virtually incapable of being implemented". "Every student in Australia will be treated exactly the same way regardless of what jurisdiction they're in," he said. Abbott said the mid-year economic and fiscal outlook due in December would make it clear how the government would account for the $1.2 billion. "We have identified appropriate savings over and above the savings that we identified prior to the election," Abbott said. The government will review the schools funding system in 2015, in line with legislative requirements. AAP