The Federal Education Minister Doctor Brendan Nelson says there will be a 20 per cent increase in funding for Aboriginal education, especially in remote areas.

Dr Nelson says that represents an increase of more than $350 million to the current budget and will run from next year until 2008.

He says an unacceptable level of disadvantage remains and the money will provide new schemes, such as in-class tuition, for those children who can not read or write.

"There are more than 50,000 Indigenous students that are being educated in remote parts of Australia," he said.

"Only 13 per cent can pass basic national benchmark tests in reading and writing and numeracy. We know across Australia only 1 in 4 Indigenous can pass a basic year 3 reading test."

The Federal Opposition has questioned whether there is any new money in the Government's funding commitment for Indigenous education.

Labor's education spokeswoman Jenny Macklin says the Government seems to be moving money around, rather than actually increasing funding.

"I'd say to Brendan Nelson, come clean with the figures and show how much extra, over and above cost increases, is really going to go to Indigenous education, it doesn't look like very much to us," she said.