Applications to a prestigious scheme that trains top teachers to head the toughest secondaries have halved because its political backers are scaring people away with talk of public spending cuts.
Managers of the Future Leaders programme believe potential applicants are being put off because they fear school leadership jobs will disappear as ministers start tackling the huge budget deficit.
The news also raises serious questions over the feasibility of Conservative plans to attract more and higher quality entrants to teaching at a time when public finances are squeezed.
The Future Leaders recruitment crisis means a planned expansion to Bristol and deprived areas of the south coast is going ahead immediately, at least a year early.
Heath Monk, Future Leaders chief executive, said: "There is a nervousness about what the job market might be like in a year's time. I think it is the prospect of public sector cuts and some of the things ministers and opposition politicians have been saying about reducing the deficit."
Future Leaders applicants who pass an exhaustive selection process go on to spend a year in a tough urban secondary. But there is no guarantee of a permanent job afterwards. The plus sides are the high quality training and mentoring they receive from experts during and after their residency year, the contacts they can make with like-minded aspiring heads, and the support they get in finding a job.
As a result, 95 per cent of the first three Future Leaders cohorts have successfully progressed to permanent senior leadership positions.
"If you are good enough this is not a gamble, the jobs are out there and you will do well from Future Leaders," said Mr Monk. "It's an opportunity of a lifetime for the best people to get into headship and make a difference."
But ministerial pronouncements may have undermined that message. In September Schools Secretary Ed Balls suggested savings could be made in senior staff costs if schools federated.
"You might have a headteacher and a team of deputy heads working across the different schools," Mr Balls told The Sunday Times.
This week Future Leaders revealed it had only had around 100 applications for its 201011 programme, around half the number that had applied at the same time last year.
Mr Monk said: "If schools are faced by real-terms cuts and Ed Balls is talking about leadership as being a way to save money, there could well be fears out there about whether there will be any jobs to get."
The problems are heightened because Future Leaders is trying to recruit earlier this year, so that participants can give their schools more notice that they are leaving.
The scheme also has more places to fill. In 2009 a total of 400 applied for 70 places but only 57 trainees that recruiters felt met the required standard were taken on.
This year with Yorkshire and Humberside, as well as Bristol and the south coast, added to the existing schemes in London, the North West and the West Midlands, Future Leaders is looking for 75 qualified teachers.
Mr Monk believes uncertainty caused by this year's pending general election is another factor in his struggle to find recruits.
But the Labour government is backing Future Leaders' current growth and the Conservatives would pay for an even bigger expansion taking in the North East and primary schools.