Two local authorities in London were this week facing threats of legal action over school budgets.
In Haringey, north London, the local National Union of Teachers branch threatened to take the council to court over its alleged failure to consult governors and parents over spending.
The branch says an extra 1,000 pupils in the borough's schools could mean an increase in class sizes because the council has failed to fund the extra staff needed.
Haringey NUT leaders were meeting senior lawyers from the union's headquarters on Wednesday to discuss their plan to seek a judicial review or an injunction against the council.
But a specially-convened meeting of councillors was due yesterday to decide to pump an extra Pounds 1.3 million into schools budgets in an attempt to bridge the spending gap.
Dr Philip Jones, chair of the borough's education services committee, rejected the NUT's allegations.
He said: "We are confident that we have gone through the proper procedures. The budget was Pounds 1.5 million short of what governors and heads were expecting, and it would have meant very real difficulties in schools. But the extra money we are putting in will deal with the problems."
The extra money has been found from other services and by raising reception class sizes from 27 to 29.
Tony Brockman, secretary of Haringey NUT, said: "The council has failed to consult governing bodies as required by its own scheme of delegation. We believe there is a strong case here to answer."
In Wandsworth, south London, representatives of 20 schools have met to discuss seeking a judicial review and are due to meet again next week.
They include campaigning barrister Michael Mansfield, who has children at a school in the borough. His office confirmed that the possibility of legal action was being "actively considered".
Dick Cooper, head of Honeywell junior school in Battersea, said the council has cut 2 per cent from delegated schools budgets and failed to fund an extra 342 pupils.
He said: "Wandsworth says it has done its best, but there are some schools who are horrified by the effects of the cuts.
"There is no precedent for what we are considering. If it works, we will get our 2 per cent back, but the much more important implication would be for local authority finance generally, because it would mean councils could not make cuts which would affect services."
A spokesman accepted there had been a 2 per cent cut in schools budgets but said that the council spent Pounds 5 million over its SSA for education. This week's Audit Commission report showed schools in Wandsworth and other parts of London were given more money than in many other parts of the country.