Teachers are in danger of missing out on almost pound;500,000 of training money because of rules stopping schools claiming funds in consecutive years, TES Cymru has learned.
The money will have to be handed back to the Assembly government if it is not distributed by the General Teaching Council for Wales (GTCW) by April next year, meaning it will be lost to schools.
The council sent an email to local authorities this week saying that "plenty of funding" is still available for continued professional development (CPD) and urging teachers to apply for grants.
It also revealed that applications have dropped "significantly" after an announcement by the Assembly government in October that CPD funding will be scrapped.
The Assembly currently funds the programme to the tune of pound;3 million a year. This will end next April due to Assembly concerns over bureaucracy and that spending is not always in line with its own priorities.
Despite there being enough cash left to fund around 700 grants, many teachers are still having applications turned down because of a new rule that was meant to make the system fairer.
This year the GTCW decided to restrict the allocation of funding to applicants who had not received grants in the previous two consecutive years.
Heads, teachers and unions have called for the rule to be dropped so the cash does not go to waste.
Dr Philip Dixon, director of the Association of Teachers and Lecturers Cymru, said: "Rather than adhere to a set of rules and have to return this money I would urge the GTCW to let all teachers have access to it. They should urgently review all cases where grants have been refused so they don't have to send a penny back to the government."
John Healy, head of Our Lady and St Michael's Primary School in Abergavenny, was awarded bursaries of pound;650 in 2007 and 2008 but was turned down this year.
Mr Healy said: "It's crazy to think that this money could be sent back when there are teachers like me who could make good use of it.
"At a time when teachers desperately need staff development they are being denied the opportunity because of stupid bureaucracy."
However, a government spokeswoman said an underspend was "unlikely", and the changes to the eligibility criteria introduced this year would remain.
Gary Brace, chief executive of the GTCW, said: "With still a third of the year left to go it is likely that all the funding will be allocated, but we will keep the situation under review and make recommendations to the Assembly government to widen the application criteria if necessary.
"The last thing we want is to have to hand money back because it has not been claimed by teachers."
In the nine years the CPD programme has been running, it has funded more than 30,000 training and development opportunities at a total cost of pound;26 million.
Teachers were given access to a range of bursaries, sabbaticals, action research projects and collaborative networks, which allowed them to improve their skills and broaden their experiences.