According to the Copyright Licensing Authority, schools copy more than Pounds 19.5 million of copyright material annually - for which local education authorities pay only Pounds 2.8m in fees.
The National Literacy Strategy - due to be implemented in all English schools from September - is contributing to the copying frenzy. Publishers say that some forms of copying used to support literacy hour work may not be covered by current licences, and fear excessive photocopying will undermine book sales.
Kevin Jeffery, the strategy's assistant national director, concedes it may boost photocopying levels but argues it will also lead to more book sales.
He is anxious to ensure teachers are not dissuaded from effective classroom practices. He gave examples of "home-made" big books or pages created by enlarging and pasting text and pictures from two books; copying and enlarging text for overhead projector transparencies for group work; and using extracts for comprehension exercises.
"We need to resolve through discussion where ideal approaches to teaching might bring teachers into conflict with existing copyright law. These discussions need to go on to make sure publishers understand the spirit and nature of the National Literacy Strategy and that we understand the concerns of the publishers."
He has not ruled out calling for changes in current copyright law, if necessary. The existing law is already waived for schools and they can copy more than is allowed under the current blanket terms of the CLA licence - up to 20 copies per pupil per year. According to a CLA survey, actual rates of copying are nearer to 67 and 119 for primary and secondary school pupils respectively.
John Davies, director of the Educational Publishers' Council, said: "We would be anxious to be as helpful as we can in the context of the National Year of Reading. But there have to be reasonable limits on what people are allowed to do.
"We can't let people more or less pirate whole books, but we have worked out between us over the years reasonable guidelines for licensing which allow schools to do more than they can under the law."