David Blunkett, the shadow education secretary, told the Association of Teachers and Lecturers' annual conference in Harrogate that failing schools could face a "fresh start" as part of Labour's commitment to make schools more effective.
"We will look at innovative ideas for dealing with failing schools. The school identified as failing would be closed and a new one would be reopened on the same site for a new school year. A new school, with a new governing body, new teachers and a new headteacher would be able to offer pupils a fresh chance for success."
If the policy were to be applied now - 44 have been identified so far - this would mean that more than 1,000 teachers could lose their jobs. As Education Secretary Gillian Shephard has not so far exercised her powers to close schools Mr Blunkett's proposal could be interpreted as a tough pre-election message to teacher unions.
Mr Blunkett emphasised this option would only happen in a small number of cases when all other efforts had failed. It would be preferable to depriving a community of its educational resources. A Labour government would look at management weaknesses and possibly change the headteacher and departmental heads and keep good teachers.
He said this would follow the best practice in industry and commerce where staff were retrained, redeployed or encouraged to take early retirement.
The plan was immediately condemned by Peter Smith, the ATL general secretary, who called it "not merely draconian but possibly illegal in terms of employment law". He added: "It would be mass murder not a surgical strike."
Mr Smith said he was saddened that teacher associations were not engaged in a positive dialogue with all political parties on how education and training could be improved rather than the negative debate about "cauterising failure".
Doug McAvoy, the National Union of Teachers' general secretary, said his union wanted a government that was willing to put sufficient resources into a school so that it never reached the stage where it was declared to be failing.