Policy-makers in the Labour-controlled authority have recommended the council exceeds its spending limit by Pounds 4.5 million and seeks a redetermination of its funding.

The authority, which is fully funding the 2.7 per cent pay rise for teachers, is looking at a Pounds 3.6 million cut to education, and heads are now drawing up “needs-based” budgets which are likely to exceed their own spending limits.

Newcastle, where the authority is facing a Pounds 3 million cut to education, has already decided to set its budget Pounds 2.4 million above the capping limit.

Devon, Somerset, Gloucestershire and Shropshire were the only counties prepared to ignore the cap, despite widespread unhappiness and protests by parents and governors.

With the deadline for the metropolitan authorities to set the budgets closing tomorrow, it emerged that nine out of 10 would be spending right up to their limit.

A TES survey of the 36 metropolitan authorities and 33 London councils revealed that at least Pounds 70 million would be cut from education budgets from April.

Only Labour-controlled Knowsley and Manchester - both spending up to their limit and funding the teachers’ pay award in full - among the metropolitan authorities outside London will not be cutting education.

Seven London authorities - Barking, Brent, Bexley, Bromley, Camden, Greenwich and Richmond - were not prepared to cut education at the time of going to press, while four said they would increase spending: Bromley is to put an additional Pounds 9 million into schools, Camden Pounds 1 million, Newham Pounds 1.6 million, and Southwark Pounds 8.5 million. Barnet, Greenwich and Redbridge are to expand their nursery provision.

Although none of the London authorities responding to the TES survey was prepared to exceed their capping limit, half spent up to it. Three-quarters were funding the teachers’ pay award in full, while one in five was going up to at least 2 per cent.

Bromley, which is on the common funding formula (CFF) for grant-maintained schools, funded the 2.7 per cent award in full for its primary and special schools while its secondaries were given just 0.07 per cent.

Only three London authorities are not funding the award at all - Kingston, Havering and Redbridge.

Three-fifths of the metropolitan authorities are fully funding the pay rise in an attempt to shield their schools from financial crisis.

But the decision to finance the 2.7 per cent award at a time when at least Pounds 57 million has been axed from their education and school budgets has forced them to revise priorities for spending on services they are not required by law to provide. Many are penalising adult education and discretionary awards, though some are increasing non-statutory nursery schooling. Authorities planning to expand under-fives’ provision included Coventry, Newcastle, Rochdale, Sheffield, Solihull, Stockport, Sunderland and Tameside.

The TES survey, which had an 89 per cent response rate among the metropolitan authorities outside London and 67 per cent among the capital’s LEAs, revealed that more than Pounds 5 million will be cut from discretionary awards, and at least another Pounds 2.5 million in adult and community education.

Almost two-thirds of the metropolitans and at least five London authorities responding to the survey will cut discretionary awards to post-16 students and local authority associations yesterday met Tim Boswell, the minister for higher education, to press him about the future of such awards.

Graham Lane, chair of the education committee of the Association of Metropolitan Authorities, said tens of thousands of people would be affected by the cutbacks.

“Discretionary awards have been one of the big casualties of the past two years of cuts brought about by government’s deliberate under-funding of local authorities.

“In real terms, awards declined by 8 per cent in 199394. And the smaller pot had to be shared out among 20 per cent more students. In the coming year, we know that cuts will continue.”

The TES survey also showed that one in six metropolitan councils will cut their administrative services, while more than a quarter plan to cut their music provision.

Five were planning to either increase school meal charges or put the service out to tender again in an attempt to drive down costs, and two - Rochdale and Wakefield - said they would cut school milk.

While the majority of authorities sought to protect schools’ budgets, Bradford was the only one to specifically say it would not be funding the extra 1,300 pupils due to start school in the city this September. Elsewhere, the scale of education cuts ranged from Pounds 336,000 in Wigan to Pounds 6 million in Sunderland and Pounds 6.24 million in Bradford.

North Tyneside, which is spending more than Pounds 3 million more on education than the Government believes necessary, is trying to introduce flexible working hours in an attempt to save Pounds 2.4 million in central staffing costs.

The Labour-controlled authority is spending right up to the Government-imposed limit.

It is fully funding the teachers’ pay award and making no cuts to its schools budgets, but most of its non-statutory services are to receive standstill budgets.

Staff are now being asked to consider flexitime options including term-time-only working for parents and unpaid sabbatical leave.

Labour has pledged to campaign for a “fair deal” for education, highlighting cuts not just in the run-up to May’s local government elections but also to next year’s local government settlement which could be the last before a General Election.

David Blunkett, shadow education spokesman, said: “Gillian Shephard has failed in her task to restore calm to the classroom. A new revolt of parents and governors from shires and cities is reflecting the real strength of parent power.”