Act is challenging National to allow successful schools to expand, allowing Auckland Grammar, for example, to set up a campus in Mangere or Porirua in the way that Massey University has expanded to Auckland and Wellington.
Leader Don Brash also suggested copying a 1992 development in Sweden to allow any group to open a school and to receive state funding as long as they do not select their students on an academic basis.
"Montessori, Steiner, Catholic, Protestant, Muslim, Buddhist, Humanist, Objectivist, Marxist, Austrian - let the system be open to all-comers willing to prove their worth in an open market place of educational practices and philosophies," he said at the Act Party's Wellington regional conference.
Dr Brash also challenged National to give schools and parents greater flexibility by reintroducing bulk-funding.
This would allow school boards to negotiate pay directly with individual teachers (effectively performance pay), make funding follow the pupil with education vouchers, allow parents to send their child to any school they wished, and publish school results as Australia does on the Myschool website.