Labour's post-election White Paper on education will propose "rewarding" heads of successful schools with greater freedom on pay and conditions and the national curriculum.
Heads would get similar freedom to disapply the national contract as principals of city technology colleges and city academies.
An overhaul of the national contract is a long-held ambition of senior Labour figures. Peter Mandelson, still a figure close to Tony Blair, wrote in a Sunday newspaper last week of the need for "greater flexibility ... in employing teachers and staff". It is also a pet project of Stephen Byers, tipped as education-secretary-in-waiting.
The manifesto, published on Wednesday, says where headteachers "demonstrate success we will further extend their freedom to manage their schools effectively." A party education source admitted: "We want to give heads more flexibility on pay."
Heads have already been given the go-ahead to aard recruitment and retention allowances of up to pound;5,000 a year. "We want to look at what other flexibilities there could be for successful schools," the source added.
Labour no longer believes such a move would be controversial. "People said we could never introduce performance-related pay three years ago. They said we couldn't introduce any differentials. This year we have already introduced the potential of a pound;5,000 differential which the head is free to use. It extends that principle."
Apart from CTCs, only schools in education action zones are allowed to jettison the national contract and none of them do so.
The manifesto says Labour would "build significantly" on the workload review launched this month by Education Secretary David Blunkett in response to union demands.
Doug McAvoy, general secretary of the National Union of Teachers, said that had to lead to a new national contract. "You can't raise teacher morale if you simply allow discretion in pay and conditions at a local level."
Labour also ran into criticism over a manifesto claim that it has already written off loans for trainee teachers. That is still only a proposal, contained in the schools Green Paper. Consultations do not end until June 1.