Hundreds of schools will be forced into the control of accredited education providers following proposals expected to be outlined in next week's white paper.
In 21st Century Schools, measures will be proposed requiring local authorities to use "accredited providers" as part of their school improvement plans. The aim is to raise standards by creating not-for-profit chains of state schools run by education providers and executive headteachers under a single "brand".
The chains should share the same ethos and identity under joint management and governance. By sharing the best teachers and pooling resources such as administration and facilities, Ed Balls, the Schools Secretary, hopes both to raise standards and to reduce costs.
The proposals are essentially an extension of the controversial National Challenge Trust programme, which pairs schools that do not meet the 30 per cent top-grade GCSE benchmark with a successful school in the same area.
However, the plans will also build on the academy programme, under which education providers sponsor groups of secondaries.
But it is the number of schools and the criteria by which they will be judged, as the white paper puts it, "less strong" that is a concern for both schools and unions.
The issue not only affects National Challenge schools, but also those just above the national GCSE "floor" targets, "coasting" schools and those with a "large gap in attainment between poor and wealthier pupils".
The National Association of Head Teachers criticised the plans, claiming the Department for Children, Schools and Families does not grasp the concept that there can be "good schools in challenging areas".
Mick Brookes, its general secretary, said: "It is based on a false premise. We want to see children do better and show that they can attain across a broad range of areas, but it takes time. It's about education in the community and that takes time. Bullying and harassing schools in this manner does no one any good."
The NUT supports the idea of schools collaborating to share best practice, but opposes the idea of coercing them into federations.
"Central government should not force schools to merge as this will only alienate teachers and headteachers," said Christine Blower, the union's general secretary. "What is needed is for local authorities to work together with groups of schools to achieve the best educational outcomes for children and young people."
The white paper will call for executive headteachers to be rewarded if they run a board of headteachers; they will be expected to act as "troubleshooting consultants" for schools.
Heads who take on extra schools temporarily will be in line for a pay increase 5-20 per cent above the top scale of the pay band. Mr Balls has asked the School Teachers Review Body to look into the pay of heads who take up the role permanently.
The Association of School and College Leaders welcomed greater collaboration between schools, and in particular the decision to scrap the idea of a salary cap proposed by the pay review body.
John Dunford, the association's general secretary, said: "ASCL has long promoted the benefits of schools working in collaboration ... Some of the most imaginative work is being done in the field of school improvement and I am pleased that the Government is seeking to build on this."
But the union fears the Government may rush schools into forming partnerships before they are ready.
"I am concerned that the secretary of state is seeking to create many of these chains by the beginning of 2010," Dr Dunford said. "Except in emergency circumstances, such as a school failing its Ofsted inspection, partnerships are best built over time, and political impatience should not put at risk the establishment of sustainable arrangements."
Hackney in east London is one area that has been encouraging co-operation between schools. The local authority has a number of hard and informal federations, trusts and school clusters.
According to the Hackney Learning Trust, a private, not-for-profit organisation that replaced the local education authority, greater collaboration is the future for schools.
Alan Wood, the chief executive, says more collaboration will provide greater efficiency and, eventually, greater autonomy in schools.
"For the past 15 years schools have had too much control over infrastructure such as payroll and financial management suppliers," Mr Wood said. "A local authority in control of 80 schools could end up dealing with 30 different suppliers. So it will save money in the long run.
"The next big step for schools is co-operation. Sharing expertise and sharing leaders will only help schools. If the executive heads are allowed to deal with the policy and strategy of the schools, the individual school heads can then worry about the focus of their schools in terms of curriculum and pedagogy."
White paper in brief
The best heads will run chains of schools identified as a single brand.
Governors can pay these heads above the pay scale.
Merged schools will pool resources, such as administration and business managers, to cut costs.
Ofsted inspectors will only look positively on federations where they are leading to better outcomes.
School report cards will rate performance from A to F.