The School Teachers’ Review Body is expected to back Charles Clarke’s call to freeze teachers’ pay for more than a year next month.

Its report has to be handed into the Education Secretary by Monday, much earlier than previous years, as part of changes to the pay cycle designed to give schools more time to plan their budgets.

The Department for Education and Skills is desperate to avoid a repeat of this year’s schools funding crisis and has hammered home the need to keep pay rises down to inflation levels in its submissions to the independent body.

Ministers want headline pay to rise by no more than 2.5 per cent annually in a deal that would run from April 2004 to August 2006.

Classroom teaching unions will oppose such a move. The National Union of Teachers has called for a double-digit salary increase for all teachers and a rejection of a multi-year settlement.

But most participants in the process expect the review body to support the DfES with a settlement covering at least two years, of around 2.5 per cent a year.

Much less certain is how the review body will view Mr Clarke’s call for a drastic cut in the number of experienced teachers progressing to the next level of the performance-pay scale.

The DfES has said current arrangements, which have seen more than 90 per cent of eligible teachers progressing through the first two levels of the scale, are “unsustainable” and would add pound;700 million to English school wage bills by 2009. It has recommended tough new criteria that would slash those qualifying for level three in September 2004 by two-thirds and said that it wants levels four and five to be “even more challenging”.

But heads’ associations, teaching unions and the National Association of Governors and Managers have opposed this plan; only employers offered any support.

Even the General Teaching Council, which usually stays out of the pay and conditions debate, has criticised the Government for devising the proposals “in haste”.

David Hart, general secretary of the National Association of Head Teachers, said: “The whole thing is a dog’s dinner. I would have thought the STRB would have grave reservations about going that route.”

He warned that if the Government refused to back down on the proposals - which are due to be introduced in the middle of a performance review period - then there would be a “crisis”.

“If we can’t get a postponement for a year then I am certain the overwhelming majority of our members will not want to carry it out,” he said. “There is a distinct risk of a boycott.”

Mary Bousted, general secretary of the Association of Teachers and Lecturers, said that to go ahead with the performance-pay proposals would “destroy morale and undo all the potential benefits of the workload agreement”.