Classroom teachers could lose up to pound;300 of their recommended pay rise if Gordon Brown, the Chancellor, wins his battle to keep public-sector wage increases below inflation.
Mr Brown wants rises to be close to his inflation target of 2 per cent. But the School Teachers' Review Body recommended an increase of about 2.7 per cent to teachers' salaries, in a report delivered to the Department of Education and Skills four weeks ago.
This effective pay cut would create an extra headache for Ruth Kelly, the Education Secretary. She is already under pressure from Labour backbenchers unhappy about the education white paper and faces the growing threat of strike action over changes to senior staff pay.
Mary Bousted, general secretary of the Association of Teachers and Lecturers, said: "Two per cent would be completely unacceptable. It would cause a crisis in recruitment and put in jeopardy all the gains made as a result of the investment Labour has made in education."
The switch from management to teaching and learning responsibility allowances could lead to a pay cut of up to pound;10,500 a year for some teachers. Others have gained.
The two-year pay award for 2006 and 2007 is expected to be announced by Ms Kelly following Monday's pre-Budget report.
A 2 per cent increase would be a real terms pay cut for teachers. Headline inflation is 2.5 per cent, and the Government's preferred measure for calculating inflation - which excludes house prices and mortgage interest payments - shows a figure of 2.3 per cent.
For a newly-qualified teacher the difference between rises of 2 per cent and 2.7 per cent would be pound;134 a year. A teacher at the top of the main pay spine would lose pound;196 and a teacher in inner London at the top of the upper pay spine pound;272. This rises to more than pound;300 for senior teachers on management allowances.
Mr Brown's intervention also makes it less likely that school leaders will secure the bigger increase demanded by heads.
A below-inflation pay increase would further affect teachers, many of whom are already upset at the replacement of management allowances and the knock-on effect on their pensions.
A teacher on management allowance 1 who will retire after 2010 after 35 years in the profession will lose pound;717 from their annual pension if they do not qualify for the replacement teaching and learning responsibility payment. This rises to pound;4,625 for a teacher with management allowance 5.
Mr Brown has also risked provoking teachers by suggesting the recent deal on pensions - which keeps the retirement age at 60 for all current teachers - should be reopened. An inquiry led by Adair Turner, former director general of the Confederation of British Industry, has proposed raising the retirement age to 69 by 2050.
But Alan Johnson, trade and industry secretary, said: "Every deal I've reached in my life, as a trade unionist and as a politician, I have honoured."
Unison, the union representing support staff, has threatened strikes if its members do not get a similar deal to teachers.
news 16, Leader 22, Opinion 23