Ronnie Smith, the EIS general secretary, pointed out that PFI was introduced because “we couldn’t countenance having all the debt showing on the public balance sheet”.

However, with public money being used to prop up collapsing banks and financial institutions, such arguments had become obsolete, he argued: “How ironic - the Government now largely owns banks like HBOS and RBOS that are big players in PFI, so all the risk which supposedly transferred to the private sector is back with the public sector. Let’s forget about PFI - and the Scottish Futures Trust - let’s have publicly-run and publicly-funded school renewal schemes and get on with it without any more ado.”

Mr Smith also launched a stinging attack on the new funding arrangements between central and local government, which led to ring-fenced funding being scrapped.

They lacked transparency, he told the conference, adding: “We are always being told that record sums of money are going into education. So where is it going once it disappears into the coffers of the councils?”

The Government, he continued, must deliver on its manifesto promises - namely to reduce class sizes - and not hide behind “soft, touchy-feely understandings with councils”.

He challenged them to take action against authorities that “see themselves as bigger than the Government when it comes to running schools”, calling on ministers to “bite the bullet and move to promote regulations to limit class sizes across all our schools”.

Mr Smith also warned the Government against any attempt - floated by Glasgow city treasurer Gordon Matheson (TESS, May 15) - to re-open the teachers’ three-year pay deal, set to run until March 2011, given the current financial climate.