Teacher-supply specialists and local government analysts believe that if ministers succeed in attracting more graduates into teaching with promises of higher salaries linked to performance, many of them may not find jobs waiting for them.
It appears that most local authority treasurers had budgeted only for a 3 per cent rise. The average rise announced this week is 3.5 per cent, leaving schools short of cash.
Schools have sufficient money in balances to hold on to current staff, but recruitment specialists say that when staff leave, they will not be replaced. They also warned of possible redundancies following the 3.5 per cent pay rise for classroom teachers. Meanwhile numbers of applications for teacher training continue to fall.
The latest recruitment statistics show that the number of applications for the postgraduate certificate in education were, at the end of last month, down by 14 per cent for secondary schools.
They were up by 9 per cent for primary schools, but overall the number of applications for the undergraduate primary BEd have gone down by 25,000 in the past two years.
Estelle Morris, the schools standards minister, believes that appraisal and the introduction of performance-related pay will make the profession more attractive.
But recruitment specialist John Howson, managing director of Education Data Surveys, said: "It's easy for her to say that but what she has got to do is guarantee that the jobs are there for people.
"The whole of performance- related pay and the Government's approach to the training of teachers is predicated on the new entrant taking a risk. They don't get paid during training, like the police, armed forces or civil servants, and they are not guaranteed jobs.
"The Government has failed to fully appreciate the implications of a higher education system that students are expected to pay for."
Secondary school heads are already raiding balances to maintain staffing levels.
Primary school heads are likely to take advantage of the Government's promise to cut class sizes for infants and use money allocated for that to cushion the award. Junior schools, which have small balances and no access to these grants, may suffer the most.
And the Local Government Association estimates that councils will have to find an extra pound;70 million to pay for the increased salaries - the equivalent of approximately 3,000 teaching posts.
Battles are being waged at the moment between councils' education and social services departments, with budgets to be decided within the next couple of weeks. Hardest-hit areas are expected to be the shire counties and outer- London boroughs.
Chris Clarke, leader of Somerset County Council, said that the Government had to come up with the extra money for teachers. "We cannot leave headteachers and chairmen of governors in the position of offering to sack some of their staff to pay increases to others," he said.
One bonus for schools though could be the new system of Fair Funding, to be introduced in April. Councils have beentold to delegate an extra pound;1 billion, half from April, to cover services such as repairs and maintenance.
Schools are now likely to use the money to hold on to their staff, but Mr Howson said: "That is just putting off the problem for another day."