More than 3,000 primary jobs were cut last year as pupil numbers began to fall, official statistics reveal.
Class sizes rose slightly as the number of primary teachers decreased for the first time since 1998.
Experts warn that the fall is the start of a long-term demographic trend which could see thousands more teachers' jobs axed by 2010. The number of primary teachers fell from 187,400 in January 2002 to 184,000 a year later.
The number of secondary teachers rose by 1,500 to 194,400 to cope with increasing pupil numbers.
The latest figures do not include thousands of jobs lost as a result of this year's funding crisis.
Professor Alan Smithers, of Liverpool University Centre for Education and Employment Research, said: "This fall is driven partly by declining pupil numbers and partly by the funding system.
"Pupil numbers are set to fall until at least 2010. The number of teachers will continue to decline unless the Government changes the funding system to allow schools with falling rolls to reduce pupil-teacher ratios."
The figures also cast fresh doubt on ministers' claims that 25,000 extra teachers have been recruited by schools since 1997.
There are now just 15,000 more full-time qualified teachers in schools than there were in 1997, they reveal.
News of primary job losses was released on the same day as the long-awaited secondary curriculum and staffing survey which revealed the extent of the shortage of specialist teachers in maths, science and foreign languages.
A quarter of maths teachers and one in five English teachers are not appropriately qualified in the subject they teach.
The number of teachers of maths, chemistry, combinedgeneral science and French teachers who are without a qualification above A-level in their subject had risen since the previous survey.
The survey, which was delayed from 2000, was based on information provided by 209 secondaries.
Doug McAvoy, National Union of Teachers general secretary, said: "This survey hides more than it reveals. It is a classic example of spin concealing the facts."
But Charles Clarke, the Education Secretary, said the survey overstated the problem.
"Vacancy rates for maths teachers have fallen by 22 per cent in the past two years. A proportion of maths teachers are listed as having no qualification in maths but this does not mean they are unqualified.
"Most of these teachers are likely to be qualified and graduates in subjects such as physics and information and communications technology."