The authority is blaming a mixture of people leaving London due to Brexit and the cost-of-living crisis for the situation.
The council is proposing closing a number of primary schools to reduce the risk of financial deficits building up.
Councillors have also written to the new government calling for reform of the “National Funding Formula.”
It determines the way the government decides how much core funding to allocate for mainstream state-funded schools in England.
But Lambeth Council says it puts urban schools at a disadvantage.
3,243 children were starting primary schools in Lambeth a decade ago but this January that figure had dropped by 30%.
This has left more than 500 vacancies in reception classes alone, the equivalent of 18 empty classrooms.
To take part in the consultation, go to Lambeth.gov.uk/consultations