Teachers in Powys have voted in favour of strike action over up to 40 job losses in the cash-strapped authority.
Officials of the National Association of Schoolmasters Union of Women Teachers are seeking an urgent meeting with the county after nearly 80 per cent of its local members backed strike action in a consultative ballot.
The union claims Powys's education budget has lost pound;2 million, and that cash allocated for workload reforms has been used to prop up school spending.
Only 30 per cent of experienced teachers eligible for performance-related pay rises to point 3 on the upper pay spine will get them - against the advice of the Welsh Assembly government - while the council is sitting on pound;36.9m of reserves.
But a council spokesman said Powys had put up council tax and held other departments to standstill budgets in an attempt to ensure a funding increase for schools, following a "poor budget settlement".
And he dismissed the pound;36.9m reserves figure as a "nonsense", insisting only pound;6m was available for current spending - of which pound;2m has been used this year.
NASUWT Cymru is predicting up to 40 jobs losses, although a generous early retirement package offered to schools in difficulties should mean only one compulsory redundancy. Officials are warning they will take industrial action in schools where members' interests are prejudiced by education cuts.
Tim Cox, NASUWT national executive member for south-east Wales, said:
"Those left behind are going to have bigger classes or see their workload increase rather than decrease. The job losses are across the county and in primary and secondary schools - but the demographics are that the falling rolls are in primary.
"It is clear that Jane Davidson, the education and lifelong learning minister, has told the council that they should send all of the workload money to schools and they should use it as well as an increase to the education budget - not instead.
"She has also told them to fund teachers' performance pay in full. The council has not done this and, understandably, our members are very angry."
A Powys spokesman said it had hiked up council taxes by 9.5 per cent and drawn on reserves to help plug gaps in a "poor settlement" from the National Assembly. He confirmed that pound;1.5m identified by the Assembly for workload reform had been included in the education budget which was then, like other council services, subjected to a 2 per cent cut.
This year's delegated schools budget (pound;58.4m) is higher than last year's (pound;55.5m) but pound;1.1m short of what officials had planned in order to cover pay increases, workload reforms, inflation and other cost rises.
"Despite the 2 per cent cut, education still has 5.2 per cent more than last year's budget. Highways, for example, didn't get anything for growth," he said.
"Because of the difficult settlement there is pound;1.1m less in the delegated schools budget and that has implications, which is something that schools are managing."
But the council's arguments cut no ice with Chris Keates, NASUWT's acting general secretary. She said: "Members across Powys have voted overwhelmingly in the consultative ballot to support action.
"Powys education authority must take note of the strong feeling of teachers against the council's budget decisions, which will adversely affect pay and conditions of service.
"Money intended by the Assembly to support the implementation of the national agreement on workload has disappeared into the global pot. Plans are in hand to limit the funding to support pay progression. Two per cent has been cut from the overall budget.
"This is a totally unsatisfactory state of affairs. NASUWT will not tolerate a situation where the improvements we have secured nationally are thwarted locally.
"Powys LEA should respond as a matter of urgency to the representations which NASUWT has already made on this issue."
A spokeswoman for the Welsh Assembly government said: "Local authorities make decisons about the level of funding for schools in light of local needs."
Last year, per pupil funding in Powys (pound;4,010) was higher than the Welsh average (pound;3,668). This year councils in Wales will receive a 5.5 per cent increase in funding for services from the Assembly.