Teachers' pay should be frozen in real terms for the next two-and-a- half years to give schools financial stability, ministers said this week.
The Government wants a headline pay rise of no more than 2.5 per cent - the projected average inflation rate for April 2004 to August 2006 - to avoid a repetition of this year's funding problems.
In the first oral evidence session on the pay cycle to the School Teachers'
Review body, the Department for Education and Skills also called for tough new criteria for performance pay for senior teachers, following concerns that staff are being automatically handed what are intended to be merit rises. It wants to cut by two-thirds the number of experienced teachers progressing to upper pay scale point three next year.
Government sources say headteachers' protests that such changes will be "impossible" to put in place by September 2004, have not gone down well in the DfES, where officials believe they have previously bent over backwards to accommodate heads' views. Classroom unions also oppose the upper scale changes.
England's General Teaching Council this week backed the unions. John Beattie, GTCE chair, said the Government's proposals included a set of professional standards - substantially based on existing standards for advanced skills teachers - devised "in haste" in response to funding problems.
Mr Beattie said that the issues of professional standards and pay should not be linked. "It would be regrettable if teachers came to view 'professional standards' in the light of pay progression," he said.
But the employers offered firm support to the Government. Graham Lane, Local Government Association education chair, said it was essential to reduce the numbers progressing up the upper pay scale to avoid enormous pressure on school budgets.
Research by consultants PricewaterhouseCoopers published last week suggests that schools' costs will continue to rise faster than their budgets until 2006, even if teachers' salaries are pegged close to inflation.
Mr Lane suggested that even tougher limits should be placed on the fourth and fifth points on the upper pay spine.
He also said numbers qualifying for the second point should also be cut.
"It is very important to us that this battle is won now because it is an enormous cost to schools," he said.
Employers are also backing the 2.5 per cent headline pay deal but are against the Government's plan to introduce performance pay to the main scale.
The National Association of Governors and Managers opposes the whole concept of performance pay in schools. In evidence to the review body it says it is "very difficult" to attribute improved performance by a group of pupils to any one teacher.
It suggests that entire staff of schools could be given extra one-off payments for outstanding performances instead.
The Office for Standards in Education said that, given schools' reluctance to apply performance criteria to those on the upper pay scale, it is unlikely they would be successful in linking performance to pay on the main scale.
The Education Secretary said that he was proud of the Government's record of raising teachers' pay. Charles Clarke said that Labour had "ended the times when teachers were underpaid and undervalued".