Education Secretary Charles Clarke said in March that he intended to press ahead with a controversial plan to make annual pay rises for main-scale teachers dependent on written performance reviews from heads.
The plan announced by the pay review body angered teachers who had previously considered the annual rise to be automatic.
Now, after consultation with unions, employers, and other pay partners, Mr Clarke has said that he is prepared to talk about how best to introduce "more rigour" into main-scale progression from September 2005.
Unions, apart from the National Union of Teachers, say the concession shows how far their partnership with Government, which began with the workforce agreement, has come.
The news came as it emerged that the NUT, which opposes the agreement, will be excluded from joint discussions on the management allowances despite the pay review body's stated view that all the main stakeholders should be involved.
John Bangs, NUT head of education, said the Government was operating a two-tier consultation system that penalised those prepared to stand up for what they believed.
Mr Clarke also announced "urgent" discussions on the introduction of a school-based appeals system in September following the end of external checks on teachers' applications to cross the pay threshold.
A package replacing points 4 and 5 of the upper pay scale with an excellent teachers scheme only available to a minority, already agreed with employers and all the unions, except the NUT,will go ahead as expected.
Eamonn O'Kane, general secretary of the National Association of Schoolmasters Union of Women Teachers, said he was pleased "the days of sterile exchange during statutory consultation" had ended.
John Dunford, general secretary of the Secondary Heads Association, welcomed the talks on the main scale, saying that heads did not want more bureaucracy introduced into the pay system.
The rewards and incentives group, including representatives of the employers and Government and all teaching unions, although not the NUT, is now meeting weekly to discuss outstanding pay issues.
These include new management allowances, threshold appeals, progression on the main scale, the review body's regional pay proposals, and details of the excellent teachers scheme. The latter two issues have to be resolved by September.