The Victorian Government has announced $20 million will be spent on a new school in inner-city Melbourne, but has faced allegations of inappropriate political promotion.

Victoria’s Premier Denis Napthine says the money has been included in next month’s budget for a new public high school in the suburb of Prahran.

The school is designed to fill a gap in the Stonington area, but the timing and nature of the announcement has been questioned.

Premier Napthine the school will cater for about 400 students.

The exclusive inner-city suburb has been without a suitable school for some years, forcing many students to travel up to an hour on public transport to the nearest site.

“We are seeing significant population growth in these areas, significant increases in enrolments in local primary schools and the challenge is where those students go for government secondary education,” Dr Napthine said.

Only last year the state’s education department released a report saying there was insufficient demand for a new secondary school in the area.

The project was launched at a nearby South Yarra primary school, which was adorned with dozens of blue balloons and emblazoned with Liberal party advertisements for the local member, Clem Newton-Brown.

The inclusion of party-political messaging at a state school not far from an election has been questioned, Mr Newton-Brown faces a tough campaign to retain the seat he held with just a 4.3 per cent margin at the last election.