TEACHERS could pay the price for ministers' mistakes on school funding by receiving below-inflation salary increases next year.
The number of teachers gaining performance-related pay rises is also under threat as ministers try to avoid a repeat of this year's funding crisis which has left hundreds of staff facing redundancy.
They are concerned that an above-inflation rise would leave schools without the money they need to implement the deal to cut teachers' workload.
Inflation is currently 3 per cent, equivalent to less than pound;15 per week for a teacher at the top of the main pay scale.
David Miliband, school standards minster, said: "In any organisation where 80 per cent or more of the spend is on people, decisions on pay and promotion are critical to budgetary discipline.
"The more we pay existing staff the less we have for extra staff, which is a key element in our joint priority of workload reduction."
Unions, ministers and employers are currently discussing extending next year's pay deal to two or three years to provide greater stability in schools' budgets.
But unions are likely to oppose the move unless their members receive an above-inflation increase.
As The TES reported last month, ministers have ordered civil servants to find savings that can be added to schools' core budgets.
Specific funding for teachers moving up the upper pay spine and for in-service training are among the projects that could be reallocated.
David Hart, general secretary of the National Association of Head Teachers, said that heads would "react with horror" to any move which tried to end funding for performance pay.
Ministers can point to official figures which show that some of the areas with the greatest financial problems pay teachers the most. Croydon has been among the areas hardest hit by this year's school funding crisis.
Teachers in the south London borough are paid the highest average salary in the country. In March 2001, the latest date for which pay information is available, pound;32,930 - pound;7,800 more per year than staff in Solihull, Birmingham.
Many London boroughs have been hit hard by rising costs associated with teachers' salaries including this year's pay award and increased pension contributions.
Outside London, Essex, Plymouth and Norfolk have all reported funding problems and all pay relatively high average salaries.