Their warning came as the Grant Maintained Schools Advisory Committee sent letters to the teacher unions warning them of large-scale job losses and asking for an urgent meeting to discuss the implications. The demise of the sector was signalled as staff from the Grant Maintained Schools Foundation, the body which promotes opting out, were expected to clear their desks today.

The National Association of Head Teachers estimates that some GM schools could lose eight teachers plus support staff when the Government legislates the sector out of existence. On average, secondary GM schools are expected to lose four teachers, and primaries one teacher. Every one of the 1,100 schools will also lose at least one member of support staff, says the union.

The redundancies are predicted because GM schools will lose 10 per cent of their budgets when they have to become one of three new categories of maintained school: foundation (which most are expected to become), community (based on the present LEA school) and aided (church schools).

According to the Grant Maintained Schools Foundation, one in three GM schools has increased its staff by 10 per cent and one in 10 by 25 per cent.

Pauline Latham, chairman of the GMSAC, said: “If the Government is serious about raising standards, making teachers redundant will not help.”

Richard Collins, head of Whyteleafe primary in Surrey, said that since his school went GM three years ago, he has taken on an extra two-and-a-half teachers and increased classroom support from 20 hours to 170 a week.

“If the 10 per cent cut leads to redundancies, how is it going to benefit education? The money goes back to the local authority to another tier of bureaucracy that does not support education. I will have to be looking at all aspects of staffing, as all GM schools would,” he said.

The NAHT represents the majority of GM heads and deputies. Rowie Shaw, director of professional services, said GM schools could face financial penalties over contractual arrangements. For example, some are committed to five-year deals with insurers.

“The GM issue is sensitive. While many people in the union think there should be equitable funding for all schools, it cannot be right that teachers’ jobs are being lost,” she said.

At a meeting before the election, David Blunkett, Education and Employment Secretary, discussed the setting up of a task force to look at the transition of GM schools. The NAHT has written to remind him of his proposal.

In its response to the Queen’s Speech, outlining the Government’s legislative programme, the NAHT said: “If the ending of the GM schools programme leads to a loss of some 10 per cent in budgets, there will be staff redundancies and damage to pupils’ education. There is a very strong case for a transitional period during which LEAaided school and GM school budgets are brought into balance.”

David Hart, the NAHT’s general secretary, said: “Ten per cent of a large school’s budget can be a quarter of a million pounds. This cannot be lost without redundancies. We also want to be sure that the money taken back will benefit the school system as a whole and will not be swallowed up by County Hall.”