Roger Daw, principal of the City of Ely Community College, will leave his post at the end of the summer term. His action epitomises the escalating unrest among parents and governors to school budget cuts which is now alarming MPs and putting the Government under pressure.

Paddy Ashdown, the Liberal Democrat leader, this week launched a nationwide education campaign while the National Association of Governors and Managers urged its members to spend any cash surpluses they have accrued now.

“The budget for 199596 should no longer err on the side of prudence,” said Peter Morris, chair of NAGM.

“The time has come for governors to create the prospect of financial crisis in 199697 and to tell everyone that if there is not also to be an educational crisis in 199697 and beyond, the Government must revise its educational policies.”

Protest groups have sprung up in Warwickshire, where the local authority is Pounds 10 million short of a standstill budget, Oxfordshire, where there are proposals for a four-and-a-half-day week for pupils, and in Shropshire, where 40 governing bodies have passed resolutions to resign or refuse to set budgets.

One governing body - from Queenswood county primary in Telford - has already resigned after having to draw up plans to make one teacher compulsorily redundant.

Martin Yates, former chair of governors, said: “We have no surpluses and we are not prepared to set budgets that sack teachers.”

Mr Daw, who lodged his letter of resignation with Cambridgeshire county council last week, said: “I want people to be fully aware of the crisis we face, of an education system which, like the health system is stripped to the bone.

“When primary heads talk to me of classes of 38, when I witness colleague heads under stress, when I see disillusioned governors and fatigued teachers, then I know that it is time to stand up and be counted. I am not prepared any longer to paper over the cracks.”

He said his action was not simply a protest at the cuts facing his own 1,100-pupil school - whose budget of Pounds 2.2 million is between Pounds 70,000 and Pounds 90,000 worse than it was a year ago - but addressed a national problem.

The Liberal Democrats this week estimated that there will be Pounds 700 million cut from education budgets next year. The party’s education spokesman Don Foster said: “The Government has said that the shortfall in money can be found by local authorities making ‘efficiency gains’ - in other words sacking teachers and creating larger classes.”

Mr Daw, who is now looking for consultancy work, said: “I have been a head for 11 years and can find no area which has not faced reductions, be it in books and equipment, caretaking, grounds staff or internal maintenance.”

In his own school parents will be doing all of the decorating next year and children are already sharing text books.

“The politicians will trot out the usual hypocrisy about ‘increases in real terms’ when they know that the box of chalk of 1975 is the computer of 1995.”