The National Union of Teachers, traditionally hostile to teacher supply agencies, will be naming Capstan as one it believes its members can do business with.
The agency and the union are finalising the details of their deal, but Doug McAvoy, NUT general secretary, believes he will be able to recommend Capstan to schools next term. He said: "Our aim is to persuade local authorities to build up and maintain their own supply pools. All teachers should be covered by the teachers' pay and conditions document and receive fair treatment. In the meantime we are prepared to work with agencies that agree to meet our requirements."
The agreement was made the same week as a 10-minute Bill aimed at providing a statutory framework to vet agencies before registration, to insist on checks on staff and allow agencies to be inspected was introduced in the House of Commons by Margaret Hodge, Labour MP for Barking.
She said a Department for Education and Employment survey showed that one in 25 teachers is on supply and anyone can set themselves up as an agency. In one case a temping agency for crane operators in south Glamorgan decided to diversify into teaching after seeing a gap in the market.
Ms Hodge said while some agencies were reputable others were not carrying out vital checks. For example one Manchester agency director sent to schools to drum up business was recognised as someone on the DFEE's List 99 (teachers' blacklist).
One young supply teacher sent to a Mitcham school gagged three children with tape when they refused to be quiet on her second day.
The Bill, which is unlikely to become law, also addressed concerns that many overseas teachers were avoiding paying tax by becoming off-the-shelf companies - some agencies, encourage this, said Ms Hodge.
The NUT, which shares many of the MP's concerns, has passed a number of motions condemning the practices of teacher agencies for undercutting wages, not carrying out adequate checks on staff and taking on unqualified staff. Last year it voted to set up its own register of members.
Now it has decided to give a seal of approval to Capstan and has said it will recommend others if they are satisfied certain standards are practices are kept.
A new circular issued by the Department for Education and Employment on the use of supply teachers has largely been welcomed as a step in the right direction. But many, including some teacher supply agencies, want to see a statutory framework.
The circular says the headteacher, or senior member of staff, will usually decide how and when to recruit a supply teacher. If the school uses an agency it must be confident it will be able to provide a suitable teacher. It is also the school's responsibility to ensure that an agency carries out the necessary checks on teachers on its books. Agencies should come to arrangements with local authorities to organise police checks on their recruits and must check with List 99.
New regulations on the hiring of overseas teachers allow them to be employed for a limited time. After two years they must come under the auspices of the Licensed Teacher or Overseas Trained Teacher schemes.
The circular says: "The Teachers' Regulations apply only to those with contracts of employment. However, it is good practice for schools to adopt similar practices in relation to all teaching staff."
The school must also ensure that their supply teachers are paying tax and national insurance "rather than run the risk of backdated employer contributions", says the circular. Supply teachers are not the employees of the school or the LEA, but it is unclear whether they are self-employed or employees of their agency. The circular recommends that schools and LEAs should inform their insurers that supply teachers may be used.
Gareth James, head of the National Association of Head Teachers's professional advice department, said: "Schools are increasingly having to use agencies for supply teachers. And it is not enough to rely on good practice, as the circular does, to ensure suitable people gain access to classrooms. I would like to see stricter regulations."
Chris King, director of education for TimePlan, believes agencies have improved, but would like to see tougher regulations. He said: "We have been in discussion with the DFEE about a legal framework, but it seems to have perished in Michael Heseltine's bonfire of controls.
"Heads should be able to pick up the phone and be confident that the teacher who arrives is reputable and qualified for the job."