Education Secretary Michael Gove should play no part in a review of cancelled school building projects ordered by a High Court judge, Labour has said.
Mr Gove was told to reconsider his decision to scrap the Building Schools for the Future scheme in six areas after it was ruled he had unlawfully failed to consult councils.
Shadow education secretary Andy Burnham said it was a "damning verdict".
But Mr Gove said his decisions had been "clear and rational".
The axing of the £55bn Building Schools for the Future (BSF) scheme in July last year means that at least 700 planned school rebuilding projects in England will not go ahead.
Mr Burnham has written to Prime Minister David Cameron, asking him to remove Mr Gove from any role in deciding the project's future following Friday's High Court ruling.
The education secretary answered an urgent question in the Commons on Monday.
He insisted he would approach the issue in an "open-minded" way, adding that the the judicial review had found in the government's favour on the substantive issues.
Responding to the question from Labour's John Cryer, Mr Gove said: "It was, of course, deeply regrettable that any building projects had to be cancelled.
"But the scale of the deficit we inherited meant cuts were inevitable and the inefficiency which characterised BSF schemes meant we needed a new approach."
The challenges - by Waltham Forest Council, Luton Borough Council, Nottingham City Council, Sandwell Council, Kent County Council and Newham Council - related to the revamp or rebuild of 58 schools which, if allowed to go ahead, would have cost the government £1bn.
They argued they had had a legitimate expectation that the projects would be funded.
But Mr Gove told MPs that Mr Justice Holman's advice "makes clear the decisions I made were clear and rational".
He added: "The judge has not ordered a reinstatement of funding for any BSF project. Nor has he ordered me to pay compensation to any of the claimants."
The judge ruled that Mr Gove must give each of the authorities involved an "opportunity to make representations".
Mr Burnham said: "We urgently now need an independent inquiry into Michael Gove's handling of this whole sorry saga. All relevant paperwork should be disclosed so that people can see what advice was given by civil servants and how these decisions were taken.
"We hear reports that Michael Gove overruled civil servants who warned that errors were likely and ignored legal advice - this is no way to run a department of state.
"The judge requested that the minister reconsider the decisions "with an open mind". By his reaction, Mr Gove has shown that his mind is firmly made up.
"That is why, in the interests of fairness, I am calling on the prime minister to remove Michael Gove from any role in the re-run of this decision."