Figures from a total of 87 county, metropolitan, unitary and London authorities reveal that schools in 26 per cent of councils are facing budget cuts in real terms (taking inflation and pupil numbers into account) in 1996-97.
But with seven out of 10 councils cutting other services to protect education, and eight out of 10 fully funding the teachers' pay award, the financial picture is less bleak than it might have been.
Schools in 38 per cent of the authorities surveyed will be better off in real terms than last year, while those in another 32 per cent will see no real change. The remaining 4 per cent of councils were unable to provide figures indicating year-on-year change.
The biggest real-terms cut is in Somerset, alone among the 87 authorities surveyed not to fund the teachers' pay award at all. School budgets there will be 3 per cent down on last year.
The survey found that teaching jobs look certain to be lost in 32 per cent of authorities, but half are confident that redundancies could be avoided. Nottinghamshire expects 236 teaching posts to go, Kirklees predicts losses of between 60 and 100. Forty-seven per cent of authorities are expecting non-teaching redundancies.
Nine out of ten councils are spending the maximum allowed by the Government, with 7 per cent spending below the limit and only Oxfordshire and Cambridgeshire applying to break it.
John Fowler, assistant education secretary at the Association of Metropolitan Authorities, said of the survey findings: "There's no doubt that local authorities have gone to great lengths to protect frontline school services.
"But we are sitting on a funding time bomb. The full effects of the teachers' pay rise will not be felt until 1997 and we already know that there will definitely be problems for schools unless a lot more money is shifted into education at a local level by central government."