TORONTO -- Ontario can no longer afford to spend over $1 billion on more than 600 schools with too few students, but they won't all be closed, Education Minister Liz Sandals said Thursday.

The Toronto area has the most underutilized schools, but the problem exists right across Ontario, and trustees must decide which ones should close, which could be merged with another board and which could be sold off, said Sandals.

"It may be that a school that's surplus to one board is exactly the school that another board really, really needs," she said. "We (want) the best space possible in which children can learn, and to make sure that rather than spend $1 billion on empty space we spend it on the kids that are actually there."

The province wants the different school boards in each community -- English and French, public and Catholic -- to consider consolidation where it makes sense.

"If two or three boards come together and make a good business case for consolidating several underutilized schools, we'll actually provide money to either retrofit, put an addition on, or in some cases totally build one new school," said Sandals.

"The idea that a property that is surplus to one board is going to cease to have students in an area like Toronto isn't true."

The province knows that schools in some small, rural communities will have to stay open because kids would have to travel too far to the next community to attend classes, she added.

"We actually do have special funding for schools in isolated communities that while we recognize they are underutilized, they must stay open."

Sandals said in some cases, including Toronto, it may be a smaller but older school with 100 per cent enrolment that should close and the students moved to an underutilized school with more modern facilities.

The education minister met with reporters Thursday after the troubled Toronto District School Board released a list of 130 schools that are at 65 per cent or less of their capacity, which Sandals said fell short of a plan to deal with its accommodation issues.

"Just because you've got a list of schools, that's got nothing to do with whether or not that's a good school to keep or a good school to close," she said.

The New Democrats said some Toronto parents were "in a panic" after seeing their children's school on the TDSB list, and warned the Liberals would regret closing schools in Toronto.

"The Minister of Education is thinking about bottom line instead of thinking about the community and the schools we're going to need in Toronto in the next 10, 15 or 20 years," said NDP education critic Peter Tabuns.

The Progressive Conservatives said the Liberals have had years to deal with the issue of underused schools but are only now trying to force boards to tackle the problem because of Ontario's $12.5 billion deficit.