Thousands of non-teaching jobs are set to be transferred out of the public sector under plans for the private financing of schools submitted to the Scottish Office by 10 education authorities.
Funds are also being requested for Scotland's first linked Catholic and non-denominational secondaries, in Dalkeith.
The deadline for councils to submit an "outline business case" under the Government's public-private partnership (PPP), the renamed private finance initiative, passed at the end of last month. Bids to rebuild, upgrade, renovate and replace school buildings and technological facilities now stand at Pounds 430 million.
The new PFI-style investment has become "the only game in town" for capital funding in education, apart from one-off sums released in the Budget which are essentially for clearing the repairs backlog in schools. The policy marks clear water between Labour and the Liberal Democrats and SNP, which see the deals as partial privatisation.
Under PPP, councils negotiate a contract with the private sector to build and operate schools. Buildings are then leased back over 25 or 30 years.
The chosen consortia, typically construction companies, law firms, banks and financiers, are invited to bid for each of the schemes and will take over responsibility for janitorial, cleaning and technician services and for the use of buildings after school hours which they hope will generate income. Teachers will remain council employees.
Chris Mason, Liberal Democrat leader on Glasgow City Council, which will transfer up to 500 janitors, cleaners and technicians to the private sector, said Labour should "put this Thatcherite nonsense back in its box for good".
Ironically Aberdeenshire, which is partly run by the Liberal Democrats, is one of 10 councils to make a bid to the Scottish Office for support in paying the loan charges involved. It says it has no choice because of the squeeze on public funding and its rising school population.
Joan Orskov, the education chair in Aberdeenshire, says pursuing the PPP option has given her "a heavy heart". But the Scottish Office expects local authorities to put any building project worth more than Pounds 2 million to the PPP feasibility test.
The Government will provide an upper limit of Pounds 50 million to meet annual loan charges for all projects, including non-educational ones, approved in the current financial year. This would impose a Pounds 3.6 million ceiling on Aberdeenshire which Mrs Orskov described as "derisory".
Glasgow points out in a report on its capital investment strategy for schools that the PPP route is the only way of securing large-scale finance quickly. Officials estimate they will have an average of just Pounds 7 million a year to fund future capital spending on secondary schools. This would mean the city's plans would not be completed until 2011 instead of 2001.
Marilyne MacLaren, Liberal Democrats education spokesperson in Edinburgh, said: "The private sector need to make a profit out of running the facilities and we all know that they will do this by cutting corners and reducing pay and conditions."
But her vision of private shops and advertising in schools was dismissed by Elizabeth Maginnis, Edinburgh's education convener, who prefers to describe the city's Pounds 70 million bid as "the largest single investment in Edinburgh schools for a century".