Seventy teachers stand to lose their jobs as part of a Pounds 3 million savings package outlined to meet Newport Council's budget targets for the next financial year.
The proposed 5 per cent education spending cut for 199798, which the council will be asked to approve next month, could also mean increased class sizes and school meals charges, reductions to school repairs and post-19 awards, community education, a literacy project and uniform grants.
It is feared the Newport experience will be repeated across Wales following the local government settlement from the Welsh Office. The allocation to the 22 new unitary authorities has been criticised as insufficient to maintain the present level of service.
Gerson Davies, secretary of the Association of Directors of Education in Wales, said most authorities would suffer and some faced substantial cuts. "A number of authorities are expressing concern at the impact of the settlement. "
Newport's director of education, Graham Bingham, said the council's capping level had been increased by only 1.8 per cent even though the authority has one of the lowest spending levels in England and Wales.
"What we have been given does not reflect what is needed to maintain services," he said. "I don't think Newport will be worse than anywhere else. There is a general feeling that there is not the resources to maintain the service."
Newport has the second worst primary staffing level in Wales and below average for secondary staffing. In its first year of existence 70 jobs have already been lost.
With 70 per cent of the Pounds 63 million budget allocated to schools through the local management of schools formula, and the scale of the potential reduction, it was inevitable that this element of the budget would be affected, despite the commitment both nationally and locally to raising standards of achievement in schools. Mr Bingham said: "The scale of the reductions will seriously prejudice the authority's aspiration of improving educational standards."
David Winfield, secretary of the National Association of Head Teachers in Wales, said the creation of the 22 new authorities had exacerbated the problem because economies of scale that previously existed have been lost.
He said the settlement from the Welsh Office has also failed to take account of rising pupil numbers or make sufficient provision for the teachers' pay settlement.
"There is only one option. There will be teacher redundancies in Wales on a large scale," he said. "The Welsh Office always says the money is there, but the trouble is nobody seems able to find it."
He added schools face larger class sizes, less choice and any reserves that were not used to cushion financial shortfalls last year would have to be used this time.
Mr Winfield added: "The talk is of dire cuts having to be made. The future for schools in Wales does not look a happy one."
Authorities are unlikely to gain any sympathy from the Welsh Office. Welsh Secretary William Hague has made clear that in his view education authorities have received sufficient funds to avoid making cuts.
He said: "The local authorities are receiving an increase in government money roughly in line with inflation or slightly more than inflation.
"They have to use their budgets as efficiently as they can. They should be able to run services without having to make drastic reductions."