Tens of thousands of teachers working in London and other cities are likely to miss out on a large pay rise after the Government put plans for a radical overhaul of teachers' pay on hold.
Ministers are understood to be holding back on a review of London pay bands, and the possible introduction of regional pay, because of the cost of implementation.
The review, which had been expected to be ordered last month, was also likely to look at the possibility of offering pay premiums to teachers in big cities.
The news comes in the week that a liberal think-tank called for national pay scales to be scrapped and replaced with regional pay.
Writing for CentreForum, Professor Alison Wolf said that areas such as the North East could cope with cutting public sector pay to help fund workers in the South.
Local authorities, she said, should be able to set wages according to the local labour market and the cost of living.
The Government's lack of progress on existing teaching pay bands comes as all public sector pay comes under intense pressure. Local government workers, including teaching assistants, are discussing industrial action following the announcement of a two-year pay freeze.
The Tories have already indicated that they expect a rapid expansion in the number of academies - which have freedom over pay - to lead to the end of national pay deals for teachers.
The news that the pay review has been put on ice will come as a big disappointment to many teachers, especially those in outer London and fringe areas, who have complained they are paid much less than those in the cities themselves but face the same living costs.
The starting salary for a newly qualified teacher working on the London fringe is pound;22,117, only just over pound;1,000 more than those in the rest of the country. An inner London teacher would start on nearly pound;5,000 more.
James Looker, a 31-year-old primary teacher working in the outer London borough of Bromley, said it was "very disappointing" that the School Teachers' Review Body, which advises the Government on pay, would not be asked to look at the problem in the near future.
But teaching unions have been strongly opposed to the introduction of regional pay when the idea has been suggested in the past. They fear it will only replicate problems that already exist in London.
John Dunford, general secretary of the Association of School and College Leaders, said the current arrangements had led to "cliff edges" in pay between different areas of the southeast.
Alan Homes, chair of the national salaries and conditions of service committee at the NASUWT, said: "It would be nice to get this sorted sooner rather than later." But he warned that there was a danger that some teachers could suffer a pay cut if regional pay was introduced.
A spokesman for the Department for Children, Schools and Families said: "This issue of whether to commission a review of the pay bands is still being considered. A decision should be made shortly."