Teachers could be made to switch to a five-term year, ending the traditional six-week summer holiday, in return for more money for those who perform well.
The teachers' employers' organisation has asked the Government for a comprehensive review of pay and conditions to take account of future retention and recruitment to the profession.
A briefing document agreed by local education officers said more money must be provided to make teaching an attractive job. "In return, teachers must expect that extra resources must be matched by high standards and a willingness to challenge existing practices," it said.
Graham Lane, chair of the Local Government Association, said while the recruitment situation is not critical, schools might have to send children home because they do not have enough staff if measures are not taken.
He said: "While the starting salary is adequate, older teachers with families find it difficult. Fewer young people are being attracted to the profession when they can make more money working in the media or information technology."
The new deal for schools would link better pay to the standards agenda. Mr Lane said the School Teachers' Review Body had outlived its purpose and a full-scale inquiry would be needed to assess how teachers will operate in schools in the future was needed.
He said one proposal would be to extend the number of days teachers work to let them carry out lesson planning and other duties. This would reduce teachers' holidays from 13 to eight weeks in return for a substantial pay rise. "Restricting teachers' time to pupil time not only understates the professional contribution required but also leads to artificiall y compressed working arrangements that do not recognise the requirements of those with particular management responsibilities," the paper said.
Mr Lane is also education chair of the London borough of Newham, part of an education action zone that will trial the five-term school year.
The review would also look at the role of classroom assistants and the amount of non-contact time for teachers.
Peter Smith, general secretary of the Association of Teachers and Lecturers, called the proposals to change the school year and salary structure a silly-season stunt. "Any countries that outperform the UK do not achieve success by working teachers to death," he said.
The NASUWT said it would resist any threats to the long summer break.