GOVERNMENT predictions that a further 15 education authorities will be found to be failing were dismissed by councils this week as scare-mongering.
The already strained relationship between central and local government appeared to be reaching breaking point as councils accused ministers of pre-judging performance before inspection.
School standards minister Estelle Morris said private companies may be called in to take over key council services in another one in seven authorities.
External consultants or private companies have already been brought into four of the 50 local authorities so far inspected by the Office for Standards in Education because they were judged to be failing their pupils.
Of the four - Hackney, Islington, Leicester City and Liverpool - only Hackney, in east London, has lost responsibility for a service, in this case school improvement. Decisions on contracts in Islington, north London, and Liverpool are expected next month.
Miss Morris told the Association of Chief Education Officers' meeting, at Warwick University, that she now expects at least 15 of the remaining 106 awaiting inspection to face some kind of privatisation.
And she said the Government "would not watch from the side lines" if local authorities are failing their schools and their pupils.
She said: "If necessary, where authorities are failing and do not have the wherewithal to recover quickly, we will invite bids from suitable bodies to provide the service to a minimum standard."
Her announcement comes at least a year before all councils will have been inspected - and was just two days after Chris Woodhead, the chief inspector, said he did not trust councils to publish inspection reports.
He told a meeting of local authority chief executives in Birmingham that, starting with inspections in spring term 2000, all reports would be published by OFSTED at the same time they were issued to councils.
Ms Morris's prediction left education directors complaining privately about quotas for failure and questioning previous reassurances given to them by ministers and officials that the "worst" authorities had already been dealt with. "In every group of councils now being inspected there will be one or two whose names are ringed for failure," said one. Another commented: "There is obviously a formula allocation for failure."
Christine Gilbert, chair of the ACEO, said: "Even one more failing authority is one too many. Schools have a right to expect good quality support from their authority. Failure is hugely expensive in terms of standards and resources."
Graham Lane, education chair of the Local Government Association, said: "To concoct figures for failing authorities is plain scare-mongering. The first 50 education authorities to be inspected were in areas with high levels of social deprivation. You can't set a trend for predictions of performance in dissimilar authorities."
Martin Rogers, from The Education Network, which provides information for local education authorities, said: "Goodness knows where this figure came from and where the Government thinks the private sector has the capacity to deal with that level of demand."