Teachers in Wales would be worse off if radical reforms for regional pay suggested in a new report were introduced, it has been claimed.
The report published by liberal think tank CentreForum this week called for sweeping reforms in public sector pay bargaining.
Its author, Professor Alison Wolf, attacks national pay systems that ignore local differences, claiming they handicap struggling regional economies and make it impossible for public sector managers and institutions to cope with the financial crisis.
She suggests that schools in disadvantaged areas could improve their pupils' prospects if they could pay significantly more to attract the best teachers.
Teachers' pay rates are currently determined by the Westminster government and there is no appetite by the profession in Wales to devolve powers to the Assembly government.
It had been expected that the Westminster government would ask the School Teacher Review Body - which makes recommendations on pay - to investigate the London pay bands and consider whether a similar system should be extended to other inner-city areas.
It appeared this week that this plan had been abandoned due to concerns over the costs of implementation, although the government said it would announce its final decision shortly.
David Reynolds, professor of education at Plymouth University, said the idea of wider regional pay awards would be "greeted with horror" by teachers in Wales.
"Individual contracts at school level are a very radical idea and the fear is that pay would go down badly the moment we move from a nationally determined system," he said.
"It would be a very complicated and slow process and it would require HR departments at school level to handle all the different contracts, which would prove very costly to set up."
Doctor Philip Dixon, director of ATL Cymru, said the report's conclusions were "very shaky".
"In practice, rewarding the best quickly becomes a race to see how cheaply staff can be employed," he said.
"The break up of the national system would undoubtedly leave teachers in Wales worse off, and is one of the reasons why ATL has always campaigned against the devolution of pay and conditions to the Assembly."
Gareth Jones, secretary of ASCL Cymru, said there is already flexibility within the national framework of pay for teachers.
"The danger of an entirely free labour market is the possibility, some would say probability, that schools in challenging circumstances would find it even harder to recruit the best staff than they do now," he said.
"Hence ASCL favours a national framework with local flexibility as the best means of achieving the desired outcomes for all learners."
Professor Wolf argues that individual pay scales are perfectly feasible, as shown in Sweden, which she says was once more centralised than the UK.
She said: "We in Britain should make the same change, and soon, recognising that our fiscal crisis makes flexibility more important than ever."