The money has been earmarked as part of the Welsh Assembly's Strategic Capital Investment Fund (SCIF), but Wrexham Council leader Aled Roberts said the local authority would not know how it could be spent until an announcement was made by education minister Jane Hutt.

He believes the money could be best spent on improving secondary schools Darland High in Rossett, Ysgol Bryn Alyn in Gwersyllt and the Maelor School, Penley.

But Wrexham's Assembly Member, Lesley Griffiths, said she thought the cash would be spent on a new school for the county.

Cllr Roberts said: "We have to wait for a statement by the education minister – we expect the announcement to be in the next week.

"We've got plans for the secondary schools and that would obviously be our priority.

"It's for 2009-2010, so we would hope to hear sooner rather than later so we can put plans in place."

Ms Griffiths described the £5 million boost for schools as "extremely welcome".

Also announced under the SCIF funding was a £20 million rail infrastructure improvement between Wrexham and Chester, which will improve north to south journey times by doubling the line to Saltney Junction.

Ms Griffiths said the move showed the Welsh Assembly Government was "delivering on its promise".

She said: "From a local perspective, I am delighted that the rail improvements between Wrexham and Chester are set to take place.

"This will bring great benefits for local commuters and will have a positive effect on timetables for Wrexham.

"This investment will help ensure Wrexham will be included on the proposed Holyhead-Cardiff express line sooner rather than later."

She added: "It is also important to remember that this announcement is a £350 million boost for the entire Welsh economy.

"That means, capital projects that take place in other parts of North Wales and mid-Wales, could well bring benefits to Wrexham companies, who may want to bid for those projects."