Gillian Shephard, the Education and Employment Secretary, has received a blunt warning from parents and local authority leaders that class sizes will rise further and thousands more teachers lose their jobs unless an extra Pounds 1 billion is found for schools next year.
The warning comes as Mrs Shephard prepares for yet another fierce battle with Chancellor Kenneth Clarke over his plans for a "standstill" budget which in effect will limit rises in council spending to below inflation levels.
Mrs Shephard is expected to tell Cabinet colleagues that her prediction - set out nearly two years ago in a letter leaked to The TES - that 7,000 to 10,000 teachers' jobs would be lost without more money has come true, despite her success in winning more Treasury cash.
The developing Cabinet battle comes at a critical time for the Government, which is under right-wing pressure to cut back for the sake of tax cuts before the general election.
But this week the biggest parent body joined local education authority leaders to warn ministers of the consequences of a further cut in school budgets in an election year. A wide-ranging survey by the National Confederation of Parent-Teacher Associations revealed low morale was widespread over rising class sizes and teacher shortages.
Sean Rogers, chair elect of the NCPTA, said: "The situation now is gloomy, but if more money isn't put in next year there will be a crisis. Classes are already too big. Politicians ought to be told that the patience of parents is snapping. They are sick of having to put their hands in their pockets and we're already getting a situation in some schools where parents are saying 'Can't pay, won't pay'. The Government should fully fund our children's education. "
This week council leaders told Mrs Shephard an extra Pounds 1bn was needed for the next financial year. They claimed another 5,400 staff would have to be recruited simply to bring pupil-teacher ratios back to the level of 1995, pointing out that ratios had worsened every year since 1991.
The authorities told Mrs Shephard that over a six-year period spending on central administration had been cut by 24 per cent. Youth and community services, adult education and discretionary awards to students have been particularly hard hit, along with music and other advisory services.
In setting a "standstill" budget the Chancellor intends to restrict council spending to the Government's own assessment of what needs to be spent to provide an efficient education service, plus inflation. But the councils are in fact already spending Pounds 668 million more than the Government assessment, leaving existing services vulnerable to further cuts.
Within the next few weeks Mrs Shephard will deliver her remit to the School Teachers' Review Body.
The unions are expected to ask for a substantial pay rise. They are now formulating a joint submission which will concentrate on the need to keep down class sizes and reduce rising teacher-pupil ratios.
* The Teacher Training Agency, in its evidence to the review body, is expected to impress its concerns about meeting recruitment targets.
This week it appointed John Howson, a specialist in teacher recruitment, as its chief professional adviser on teacher supply. Last month he warned MPs on the Commons education select committee that schools were facing a chronic shortage of newly-qualified maths and science teachers because graduates were unwilling to join the profession.
Jane Benham, 46, head of the further education division in the Department for Education and Employment, will also join the agency as head of teacher supply.