The Association of Heads of GM schools fears that the 667 opted-out secondaries will lose, on average, two teachers. Hundreds of non-teaching jobs in both primary and secondary GM schools are also in jeopardy.

Opted-out heads claim the cuts are being forced on them by the Fair Funding system being introduced next month. Councils will have to delegate an extra pound;1 billion to schools in an attempt to sweep away the differences in funding between GM and local authority schools. But they will retain funding for strategic management, access, school improvement and special needs.

Roy Ludlow, head of Beechen Cliff school in Bath, said: “Throughout the country there will be teacher redundancies in GM schools. This will have a detrimental effect on standards.”

Councils have now set their budgets for the new financial year and they were yesterday submitted to the Department for the Environment, Transport and the Regions. Decisions on whether budgets will be capped will be taken by March 22.

John Knowles, chairman of the GM heads’ association, said councils were not really delegating cash to schools, but were retaining money through education development plans.

Council-run schools may also have problems but Fair Funding makes it difficult this year to determine how they have fared as budgets are only just reaching heads.

But in Cambridge, council-run Mayfield primary has decided not to take any chances and has already asked parents to set up either monthly or quarterly pound;10 standing orders to help the school.

Problems are also forecast in Gateshead, which spends almost 12 per cent above what ministers believe is necessary, yet its 90 schools will share a pound;500,000 cut.

Like Cambridgeshire, it has suffered from low-spending in the 1980s when the Government constructed the formulas for standard spending assessments.

Ian Mearns, education chairman, said: “Let’s spend what the Government says and cut pound;9 million out of education and see what happens to standards then.”