SCHOOLS are bracing themselves for compensation bills totalling more than pound;1 million a year following a legal precedent established last week and the introduction of the Human Rights Act.
Headteachers have told Education Secretary David Blunkett they must be given greater freedom to expel bullies if they are to prevent further costly claims.
Their warning came after Trafford council in Greater Manchester was ordered to pay compensation to a pupil who had suffered an 18-month campaign of verbal bullying.
It was the first successful legal action over bullying in three decades.
David Hart, general secretary of the National Association of Headteachers, predicted more claims would result from the Human Rights Act, which came into force last month.
It offers two routes for claims, under two clauses: the right to an education and the right to be free from "degrading treatment".
Mr Hart said: "The cost could exceed pound;1 million in the first year unless heads are given flexibility to exclude pupils permanently in the event of inhuman or degrading treatment."
Manchester county court awarded pound;1,500 compensation to be paid by Trafford council last week after deciding that Sale grammar school was in breach of its duty of care for failing to protect a 12-year-old boy.
Now 17, the boy had been so traumatised by constant taunts - some of a homophobic nature - that he could not attend school for two years.
Liberal Democrat peer Lord Tope has now written to Mr Blunkett, calling for pupils to be taught about the problems facing young gay and lesbian people in an atempt to cut homophobic bullying.
Last week, another teenager launched a High Court battle for pound;75,000 damages after claiming that she was the victim of "persistent and prolonged bullying" while a pupil at Ifield middle school, Crawley, between 1990 and 1993.
Leah Bradford-Smart, now 19, maintains she suffered post-traumatic stress as a result of negligence by West Sussex County Council.
Judgement has yet to be delivered, but her lawyers claim that if successful, she could open the floodgates for dozens more cases.
Laura Berman, the family's solicitor, from the firm Teacher Stern Selby, said:
"If we win the case, I have several more similar actions waiting in the pipeline, as I'm sure other lawyers have."
Although individual schools are responsible for their anti-bullying policies, it is local authorities who have to foot the bill in the event of successful compensation claims.
Graham Lane, education chair of the Local Government Association, said: "It is something that many local authorities are insuring themselves against.
"We will be reviewing the advice we give in light of the recent court actions."
Latest figures from ChildLine suggest the problem of bullying is worsening, with more than 22,000 bullying-related calls to the helpline in the last year, a figure that has more than doubled in three years.
But Hereward Harrison, the charity's director of policy, research and development, argued that legal action should be the last resort for victims.
He said: "With schools required by the Government to set up and implement anti-bullying policies, we hope that bullying could be stopped much earlier, without the need for legal action."