Schools are missing out on £1m due to parents failing to claim free school meals for their children.
Richmond was ranked as the worst borough in the country for the take up of free school meals for children who are entitled to do so.
The Department for Education report said the borough has an under-registration rate of 33 per cent, the worst ahead of Surrey, which had 32 per cent.
Islington and Birmingham saw all eligible children signed up for free school meals.
If children do not claim free meals their school cannot claim extra funding through the pupil premium, which is due to increase from £623 to £900 per pupil from April.
Children in care and those with parents in the armed forced will also see their premium raised from £250 to £300.
Richmond schools would be eligible to get £3,320,000, but are missing out on an extra £1m because only 3,740 of a potential 5,582 pupils are expected to claim their free meals.
Richmond’s Liberal Democrat spokesman for education Councillor Malcolm Eady urged the council to encourage eligible parents to register their children for free meals.
He said: “For too long social background has been a deciding factor in predicting a child’s future prospects, so locally we based our children’s policies on the principle that every child should have the opportunity to reach his or her full potential.
“School meals in many of our schools have improved considerably in the past few years and I therefore suggest that parents, who are eligible, not only get free school meals for their children, but get extra money for the school, which will then be spent helping their children.”