The leader of Somerset's school governors has accused the county's education director of threatening him and writing defamatory comments about him to the Prime Minister.
Derrick Pedley, the governors' association chief executive, is now threatening libel action.
The row is the latest chapter in a dispute between Somerset Association of Governors and the council over plans to rebuild schools using the Government's Building Schools for the Future scheme.
The authority announced last year it was bidding for pound;100 million to replace four secondary schools in Bridgwater with three new "learning villages".
Mr Pedley wrote to Tony Blair, complaining that neither the association nor the county's headteachers' forum had been properly consulted. He said governors were upset because the changes involved the closure of Haygrove school, singled out for praise by Prince Charles, the Office for Standards in Education and the Department for Education and Skills.
The association also complained the council had not made it clear that the learning villages would be built under the Private Finance Initiative, meaning non-teaching staff would have to re-apply for their jobs.
Michael Jennings, Somerset County Council's education director, wrote to the Prime Minister this month denying the claims.
He said Mr Pedley's letter "presents half-truths and blatant inaccuracies in an attempt to undermine the credibility of this LEA".
Lawyers acting on behalf of Mr Pedley are threatening libel action unless Mr Jennings withdraws the comment, which they say is defamatory.
Mr Jennings is alleged to have added that if Mr Pedley's letter really represented the attitude of the Somerset Association of Governors, he would personally make sure it received no more grants from the council.
Mr Jennings and Somerset County Council said they were unable to comment on the allegations because they were being examined by solicitors.