Southwark council this week approved plans for Cambridge Education Associates (CEA) to run the authority until July 2005, despite fierce opposition from local heads.
Already wounded by their experiences in 2003 with WS Atkins, which pulled out of running the borough three years early, heads are claiming that CEA has been even worse since it started last summer.
They have accused the company's consultants of rude and aggressive behaviour and complained about its target-driven approach. Instead they want to see the kind of not-for-profit trust now running Hackney, introduced in September.
Five Southwark heads made their case to the council's executive meeting on Tuesday. But it decided to give CEA an extra year before the authority is eventually handed back to the council, as recommended in a report by the Office of Public Management (OPM).
David Hart, general secretary of the National Association of Head Teachers, has written to the council and the Department for Education and Skills to complain that the views of heads, who had "no confidence" in CEA, had been "totally disregarded".
"We have a remarkable situation where the level of anger expressed by heads regarding CEA is even worse than it was with WS Atkins," reads the letter, "That takes some doing."
It added that NAHT members would have to seriously consider whether they could continue to co-operate with CEA.
Last month heads on the authority's special educational needs steering group wrote to the company to complain about the rude and aggressive attitude shown to them by one of the firm's consultants. They threatened to resign from the group.
Gary Foskett, chair of Southwark headteachers' council and head of Eveline Lowe primary, said: "We find it remarkable that there has been this decision when nobody has asked schools and headteachers for their views on how CEA has been doing."
But Nicholas Stanton, the leader of Southwark council, said heads had been fully involved in the selection of CEA and had played a "leading role" in helping to form OPM's conclusions.
"I am disturbed that some heads are reporting problems and will happily meet them and address their concerns," he said.
Simon Jenkin, CEA director of schools' services in Southwark, said that a large number of heads in Southwark fully supported CEA's approach.
Mr Jenkin added that there had been a "difficult issue" in relation to a small group of heads in the borough about the authority's strategy on special needs, and said he would be meeting with them next week.