The creation of a new wave of grammar schools in England has been ditched from the government's plans.
The Queen's Speech says the government will "look at all options" for opening new schools, but that will not include removing the current ban on expanding selection.
The controversial plan to stop free lunches for all infants is also absent.
This takes away the biggest source of extra funding promised for schools in the Conservative manifesto.
The government, setting out its plans for the next two years, has not announced any legislation for education.
This means dropping their most high profile proposed education reform – the expansion of selective education in England.
The re-written plans now call for "every child to go to a good or outstanding school" – but with the recognition that any changes will depend upon being able to "command a majority".
A Department for Education source said that the Queen's Speech was an unambiguous decision not to go ahead with creating more grammar schools.
- No new grammar schools
- Plans dropped to stop free lunches for all infants
- No legislation announced for education
- School funding plans to be put forward at a later date
- Changes to how individual school budgets are allocated will go ahead
- Technical education to be upgraded
Schools have been campaigning about budget shortages – with a letter being sent this week to two million families warning about funding cuts.
But the government's biggest proposal to deliver extra funding, announced in the Conservative manifesto, also seems to have been ditched.
The scrapping of free meals for all infants was meant to save about £650m, which would have been the majority of an extra £1bn per year to boost school budgets.
This leaves a significant shortfall in the manifesto promise for extra school funding.
A joint response from four teachers' unions said schools were "sending out begging letters to parents" and the "lack of urgent action is deeply disappointing".
Jules White, the West Sussex head teacher who has co-ordinated a funding campaign in 17 local authorities, said: "The government said that it had heard the message from the electorate.
"It's high time they acted to put things right and fund schools in a way that every child deserves."
The government says it will bring forward its proposals on school funding at a later date.
High-skills, high-wage jobs
Jo Yurky, who ran a parents' campaign over school cuts, said the lack of movement on funding had shown a "baffling disregard for the concerns of parents, teachers and school leaders".
But the government says it is pressing ahead with changes to how budgets are allocated to individual schools, through a new National Funding Formula.
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The new formula is meant to resolve unfairness and anomalies in how funding is allocated.
There is also a commitment to improving vocational education and improving the level of skills in the workforce – training people for "high-skilled, high-wage jobs of the future".
The ambition is for vocational exams to be given as much status as their academic counterparts – and there are plans for so-called "T-levels" for technical qualifications.
Liberal Democrat education spokeswoman, Layla Moran, said: "It is incredulous that the government have claimed they will deliver fair funding for every school in today's Queen's Speech.
"The reality is that pupils and teachers will still bear the brunt of billions of pounds of cuts under Conservative plans."