Ministers have launched a consultation into the nursery school free milk scheme, claiming abuse of the system means the Government is being billed up to £1 a pint.
Figures show that middlemen are charging around double the retail cost, meaning the Government is spending 92p on a pint of milk while most consumers can buy a pint for 45p.
A loophole in the system means the Government is obliged to pick up the bill, regardless of cost, submitted by firms that are acting as schools' go-between with suppliers.
Last year, it was estimated that the difference in price costs taxpayers an extra £10 million a year.
More top news
Princess Eugenie has become engaged to long-term boyfriend Jack Brooksbank, Buckingham Palace has announced.
Young women are not attending smear tests because they are embarrassed about their pubic area, a cancer charity has warned.
Amazon is opening its first artificial intelligence-powered supermarket in Seattle on Monday.