The Office for Standards in Education is being accused of undermining the quality of school inspections by refusing to pay adequate prices for carrying out the work.
According to private contractors who organise inspection teams, prices for reporting on schools are forcing them to cut the pay of inspectors to an unacceptably low level.
Neil McIntosh, chief executive of CfBT, a non-profit making company supplying educational services, says pay rates are so low that companies are likely to run into difficulties securing the services of good inspectors.
"I can't prove it, but I believe that prices have for some time been undermining the quality of inspections, " he says.
"OFSTED is taking a risk with the system. I do not believe it has the means to tell whether an individual inspector is doing a mediocre or an excellent job."
The major contractors estimate that the prices for inspecting primary schools has fallen by around 30 per cent in the past 12 months. The daily rates for inspectors are being reduced to #163;200 and, in a number of cases, to #163;150.
Most contractors were unwilling to be named, but one of the larger companies said: "There are a lot of unhappy inspectors out there." A number of contractors said it was becoming impossible to earn a realistic full-time salary from inspection.
OFSTED rejects any suggestion of a decline in quality. It says market forces determine the price at which contracts for school inspection are awarded. Clive Bramley, head of contracting, insists that all contractors have to meet strict quality standards. The rates being paid to inspectors is determined by contractors, he says.
"We have heard rumours about the rates, but they are not our business. I am confident inspections are carried out by highly competent people," Mr Bramley says.
There are more than 200 contractors competing for the #163;90 million OFSTED spends annually on inspection. Small operators without office overheads have taken over from local authorities as the dominant players.
The cost of inspecting schools is the largest inspection budget in the public sector and any doubts about quality are likely to be taken seriously by ministers.
The CfBT, which has seen a halving in the number of primary contracts it wins, is the only company willing to publicly voice its doubts. Mr McIntosh accuses OFSTED of failing to manage the market effectively.
"OFSTED ought to have a view about the pay of inspectors. They want consistency and high standards, yet the system is now dependent on the professionalism of a group of people who are not paid the proper rate for the job," he says.
In theory, prices could fall further as the number of school inspections is reduced.
Next year fewer than 5,000 schools will be routinely inspected, compared with 7,300 this year.
The law requires OFSTED to ensure competition, but Mr Bramley insists that price is not the determining factor and OFSTED operates stringent quality control.
However, only a small of number of companies have failed the quality test.