Plans to make employers meet early retirement costs fully were dubbed "scandalous" by the National Association of Head Teachers. It said the proposals would force teachers to carry on working, damaging "the standards the Government wishes to raise".
The union disputed claims that the Pounds 100 million the Treasury would save "immediately" would be reinvested in education. It said: "There is every prospect that the money will be taken by the Treasury to fulfil the Government's public-sector borrowing policy for 199798."
Heads added savings for employers from cutting their contribution by 0. 85 per cent would be swallowed up in the Pounds 78m it would cost to pay 13,000 teachers to stay put.
The National Association of Schoolmasters Union of Women Teachers accused ministers of mismanaging the TSS which has a Pounds 1.5 billion deficit due to the growth in early retirements. More than 150,000 teachers have taken early retirement or resigned because of ill-health in the past 10 years, triple the number quitting at retiring age.
Teacher unions believe the TSS should be more than five times larger. They believe that there should have been better rates of return on the fund's investments.
The NASUWT will ask ministers to delay the proposed changes until after local government reorganisation as new unitary authorities will face restructuring difficulties and redundancy may be the only option.
Birmingham education authority has said that the recommendations could cost it around Pounds 1 million a year. Tim Brighouse, the authority's chief education officer, said: "This is a breathtaking avoidance of central government's responsibility. It will lead to worse standards of education, contribute powerfully to the nation's health costs and reduce opportunities for young teachers."
Alan Thompson, head of Park View Community School, Chester-le-Street, said that if greater numbers of ineffective staff were trapped in the system schools might have to use disciplinary procedures more often. He warned: "There are some nasty decisions ahead."