All 40 teachers who applied last year for the threshold at Balcarras secondary, a technology college in Cheltenham, Gloucester, passed, and Mr Healy said nearly all were likely to satisfy the criteria for progressing up the pay spine.
This is not surprising in a comprehensive which featured in this year's Office for Standards in Education list of outstanding schools. Inspectors found teaching was good in more than 80 per cent of lessons.
But because of the way the Government is funding the scheme, which takes no account of how many good teachers a school has, 60 per cent of these star performers will find that their progress up the pay spine comes to a halt unless the school cuts the amount it spends on items such as books and maintenance.
The arithmetic is simple. The school needs pound;40,000 to make the post-threshold payments. Because national funding for these is only 40 per cent of what schools need, Balcarras expects only pound;15,000 from the Government - enough to fund the extra pound;1,000 for only 15 of the 40 teachers. It has already set a roughly balanced budget for 2002-03.
A pound;25,000 cut may not sound much for a school whose overall budget for next year is pound;3.125 million. But Mr Healy said the governors were concerned that the extra money would have to be found every year in the future.
"You are talking about over-spending on staffing every year. Next year another group of teachers will reach the threshold, so the shortfall will be even greater."
The Government says more money is going into councils' education budgets this year, and Gloucestershire's funding is indeed rising by 6.7 per cent. But Mr Healy said the rise amounted to only 1 per cent after increasing pupil numbers and the cost of the teachers' pay deal generally were considered.
The governing body is refusing to make the budget cuts, so deserving teachers will be disappointed, and Mr Healy is left with a series of difficult and stressful decisions.
He said: "I can't do it. To choose 40 per cent of my staff to be recognised and rewarded and to turn down 60 per cent - it can't and shouldn't be done. Had I known that this was going to happen, I would have been against the threshold scheme as a whole.
"The scheme as it is presently intended to operate can do nothing but destroy morale in staffrooms."