It should have been a tidying-up session, putting the final touches to a ministerial working group’s improvements to last year’s bungled consultations on reforming school governance.

Instead, a government discussion paper circulated just before the “Way Forward” group met last week, propelled governors to the forefront of the debate on the privatisation of public services.

The document proposed that private or public sector organisations awarded contracts to turn around weak or failing schools should be given a “controlling interest” on the governing body.

Contractors andor the secretary of state would be able to nominate enough governors to give them a majority - and hence control everything from hiring and firing staff, to performance management, and curriculum planning to school development.

Teacher unions fear members would suffer, particularly at the hands of private contractors.

Doug McAvoy, general secretary of the National Union of Teachers, calls it “privatisation by stealth”. He warns teachers would have fewer employment protection rights than if schools had been transferred to the private sector.

He adds: “Teachers consider their professional role as being a public service which is incompatible with making profit for the benefit of shareholders of private companies. Teachers are committed to serving the public. This ethos cannot be replicated within ‘for profit’ companies.”

Nigel de Gruchy, general secretary of the National Association of Schoolmasters Union of Women Teachers, calls the proposals a “constitutional outrage”. “They are handing over publicly-owned institutions that should be accountable to their various constituencies to private-sector companies. This is worse than the train privatisation,” he says.

Governors have similar concerns about accountability. With a majority nominated by contractors, governing bodies would be beholden to their sponsor - rather than the local community.

Chris Gale, chair of the National Governors’ Council, is concerned about such issues - and also what happens if the company with the contract goes bust or pulls out. “For a government that is keen to get parents more involved in schools, it is a contradiction to undermine accountability to the community. It is arguable whether this is a governing body or a managemnt board,” she says.

The Department for Education and Skills paper acknowledges that putting the “producers” in the majority flies in the face of the Way Forward group’s work on ensuring a balance “equal or in favour” of consumer stakeholders - such as parents. The proposals would allow contractors to nominate parents who don’t even have children at the school.

But the non-profit-making company in charge of the first “privatised” school believes control of the governing body is needed to ensure necessary changes can be made to staffing.

3Es, an offshoot of Kingshurst city technology college in Birmingham, resolved the management issue by relaunching Kings Manor in Guildford, Surrey, as voluntary-aided Kings’ College. It is now relaunching another Surrey school, France Hill in Camberley, as Kings International in the autumn.

Meanwhile, the Way Forward group has just about finished tidying up last year’s muddled reforms. A paper is being prepared for ministers - a final version is expected to be released shortly for further consultation.

It seems likely that governors will no longer hear teacher-dismissal cases; in future they will be restricted to hearing just the appeals. But governor organisations may have won their battle to retain discretion over other staffing matters, particularly appointments. While new guidance is likely to recommend they limit their involvement to the senior management team - leaving more junior appointments to the headteacher - they look set to keep their flexibility to intervene when necessary.

Click on “school governors” at www.dfee.gov.uk for more details