Eric Fisk, headteacher, says the Government has failed to take into account spiralling costs at the school which have led to a shortfall in funding this year of around pound;70,000.

His 600-pupil school will get pound;210,000 more this year taking its annual budget up to pound;2 million but the extra cash has been swallowed by wages and increased national insurance and staff pension contributions.

Last year, the school’s salary budget for its 40 teachers was around pound;1.3m. Now it is more than pound;1.5m.

“Although I’ve got more money on paper, it is not really there. The salary bill has gone up by about the same amount as the school budget and it’s a standstill budget as far as I’m concerned,” said Mr Fisk.

The rising costs have been compounded by a loss this year of funding which previously came through the standards fund, including pound;22,000 to help children at risk of becoming disaffected.

The school is not currently considering redundancies but will have to make cut back on building repairs, grounds maintenance and investment in computers.

Money from Durham council which had been intended to support achievement at key stage 4 will be used to subsidise funding from the Government.

And almost pound;20,000 of government cash which had been given to the school so that it could start to reduce teacher workload by bringing in assistants and technicians will also have to be raided.

“I’m going to have to use it simply to maintain teacher staffing levels,” said Mr Fisk.

He added that Durham LEA had been “supportive” of the school’s position but had funding difficulties of its own - it is not one of the 36 LEAs getting a top-up to its schools’ budgets, announced this week.

Mr Fisk said: “Some of my colleagues will say their LEA has been holding on to money that should be in schools but that is not the case in Durham. The extra allocations are a recognition that schools have been underfunded.”