The Government’s Green Paper on modernising the teaching profession, due to be published next week, has catapulted performance-related pay back to the top of the political agenda once again. With it comes the sobering spectre of embittered and divided staffrooms.

David Blunkett, the Education and Employment Secretary, has said that the paper will, among other things, explore ways of creating a more flexible pay system to reward high-performing teachers in the 2000-2001 pay round.

The Government plainly wants to use the Pounds 1.2 billion set aside in the Comprehensive Spending Review (for service development) not for an across-the-board increase for all teachers but, rather, for a targeted rise for the majority considered to be doing a good job.

A performance-related pay system would come on top of the existing discretion heads have to make such awards and the Government’s plans to reward 5,000 advanced skills teachers with salaries of up to Pounds 40,000 a year.

It is understood the Green Paper will - having set out a range of options - come down firmly in favour of one of them. The question is, which?

The basic choices are simple enough. Will it be a teacher- or a school-based scheme? If it is teacher-based, an option would be some form of appraisal or competency-based system to determine who gets more money. Alternatively, rises could be based on a teacher’s success in meeting agreed performance targets.

A school-based system, on the other hand, would depend on success in meeting whole-school targets. Schools which succeed in improving exam results, cutting truancy or exclusions would be given extra funding to be distributed in the form of higher pay.

The most likely option, however, seems to be a mixture of these approaches, with schools that meet their targets using their funding “bounty” to reward good teachers. Who gets what would then be determined on the basis of appraisal, success in meeting personal targets, or both.

One possibility is that headteachers, or governing bodies, will be given flexibility to decide how their bounty is divided up. If that happens, it seems clear most will opt for an appraisal system.

What might a revised salary structure look like under these circumstances? It now seems certain that heads and deputies who had hoped for above-inflation rises in the next pay round will - like the rest of the profession - have to wait another year.

It is thought that ministers, who just a few months ago asked the School Teachers’ Review Body to consider changes to heads’ and deputies’ salary structure from next April, are anxious that they should not be out of skew with the rest of the profession.

The Government seems to have a new extended pay spine in mind, with all qualified teachers progressing to a certain point - likely to be similar to the current main scale maximum of Pounds 23,000 a year.

Good teachers, however, will have the opportunity to be promoted - without taking on additional responsibilities - to a new grade, subject to passing an assessment. Further progress up the new grade would depend on annual assessments.

Departmental heads and advanced skills (“super”) teachers seem likely to be included with heads and deputies in a new “leadership grade”.

A crucial question is who will be allocating the extra money. The most likely answer is headteachers, overseen by some form of external monitoring. Governors are also likely to continue to play a key role in setting heads’ pay.

The Government’s determination to press ahead with PRP has already alarmed the two largest classroom teacher unions, the NUT and the NASUWT.

Doug McAvoy, the NUT general secretary, has warned that PRP will be rejected by teachers and its imposition will lead to industrial action. Mr McAvoy had been hoping to persuade his union to support pay rises linked to assessed competencies - in-service skills training and professional development - rather than results.

Nigel de Gruchy, general secretary of the NASUWT, is opposed to PRP because a crude payment by results system does not take into account the multiplicity of factors which determine pupil achievement. However, he does entertain the idea of linking pay to appraising teachers’ skills rather than the achievements of their pupils. This, he says, could help more than half the country’s teachers stuck on the unpromoted maximum of Pounds 23,000 a year.

Peter Smith, general secretary of the Association of Teachers and Lecturers, considers that a reward system which recognises teachers’ competencies is the best way forward, coupled with a loosening of the links between pay and the size of schools.

“The key issue is that the system should be seen to be fair. Teachers in the classroom will be powerfully influenced by whether they see that there is one rule for the geese and another for the ganders. The way that heads and deputies are rewarded should be part of a salary policy for the whole school.”

Significantly, the headteachers’ associations - the Secondary Heads Association and the National Association of Head Teachers, both, to varying degrees, seem to be beginning to accept that some form of PRP is inevitable.

John Dunford, general secretary of the Secondary Heads Association, says that his association’s view has changed in the knowledge that it may offer the only way forward for a better career structure for teachers and to ameliorate the teacher supply crisis.

“If you have a system that is rewarding 75 per cent of teachers who are doing a really good job and the other 25 per cent know that they can strive for it and be rewarded for it the following year, then it may be worth the candle. ”

David Hart, general secretary of the National Association of Head Teachers, said his association would infinitely prefer a substantial across-the-board increase for all teachers, but if this was not on offer then the association has to talk seriously to the Government about alternatives such as PRP.