Primary and secondary schools in Sheffield claim they are close to meltdown amid a budgetary crisis which means some are unable to fund delivery of the national curriculum.
Heads complain of Pounds 150,000 deficits on budgets handed down by the Labour-controlled city council and 52 out 180 schools have told the LEA they need special help to balance the books.
On Monday the National Association of Head Teachers and the Secondary Heads Association will jointly reveal the scale of the crisis. Their warnings are likely to be seized on by Government ministers who are anxious to try and pin the blame for funding problems in education on their Labour and Liberal Democrat opponents.
Sheffield's budget problems will be the focus of particular attention in the run-up to the general election because Labour education spokes-man David Blunkett is a former city council leader and a local MP.
"There are a number of secondary and primary schools whose budgets are in a fairly desperate state, who against national standards are receiving less money than they ought to be," David Hart, general secretary of the NAHT, said.
John Sutton, general secretary of the SHA, said: "The financial situation in many Sheffield schools has reached the point where the education of children is seriously underfunded. We urge the city of Sheffield to take urgent and appropriate measures to restore both that situation and confidence in its services."
Arguments over Government funding of education, and councils' management of school budgets, are likely to intensify as the general election approaches.
Campaigns to increase school spending are already in place throughout the country and this week local authorities were told to expect cuts of 2.5 per cent next year and a standstill budget in 1998-99.
This week a leading local government finance consultant, Rita Hale, warned that schools would have to compete for Government cash with compensation claims as a result of the BSE crisis.
"I hope schools are not going to be squeezed but they will have to make a case for why they shouldn't have their budgets cut to pay for mad cows," she said.
This year's settlement for local government was less harsh than expected and ministers have made great play about the upward trend of school spending.
Analysis by Mrs Hale of Department for Education and Employment and Department for the Environment statistics, however, reveals councils will face a shortfall of between Pounds 2.4 billion and Pounds 2.9 billion next year. This does not include the extra money needed for rising pupil numbers and the increasing number of elderly people.
Local authorities already spend above government estimates of what is needed - with almost Pounds 1bn coming from council reserves. Across the country Pounds 708 million extra is spent on education.
Mrs Hale said ministers were likely to refute claims that budgets would be cut by 2.5 per cent next year. She said they would argue the figure was nearer 1.1 per cent, given adjustments needed for the nursery voucher scheme for which Pounds 565m will be taken from council budgets while the Government provides Pounds 185m in new money.
"That presupposes that local authorities are already spending close to Pounds 565m on the education of four-year-olds and will either collect the same amount via vouchers in 1997-98 or be able to make pound-for-pound savings to match the loss." At the moment, however, it is unclear how much local authorities actually spend on educating four-year-olds.