NSW resellers and distributors are set to be hit hard by a NSW Government decision to put on hold their computers-in-schools program due to funding issues. Among the hardest hit will be those selling networking and services.  

Late on Friday the NSW Government ordered public school principals not to apply for the Federal Government's computers-in-schools program, claiming Canberra hasn't resolved funding issues.

The Rees Government threatened to pull out of round one of the scheme in June unless it received an additional $245 million to cover installation, software and other costs. It set an October 9 deadline for round two to "solve" these issues.

NSW Education Minister Verity Firth says she has asked the Feds to extend the October 9 deadline. "The Commonwealth made a promise; the promise is akin to promising someone a brand new suit, providing them with the pants and then asking them to buy the jacket," Firth told reporters.

That argument doesn't seem to have deterred other states. Indeed Federal Education Minister Julia Gillard said the Commonwealth would not extend the deadline for NSW's sake, because it would delay the roll-out of computers to the other states and territories.

The first round of the program delivered $116 million to 896 secondary schools across the country, allowing for 116,820 new computers, mostly laptops.