Resigning was almost a matter of principle. We felt very strongly that the Government had been dishonest. On the one hand, it had given us LMS; on the other it prevented us from controlling our destiny by putting insufficient money into the system. The suggestion there is plenty of money swilling around is simply not true."
For Mick Redman and the other governors at Newbold Community School in Chesterfield, resigning en masse in March came after a 12-month battle against cuts. While few schools have taken this path, many others have had their delegated powers removed because governors have set a needs-related budget.
The dilemmas resulting from shortfalls on spending have brought together schools and local authorities against the common enemy at Whitehall. Few governors who have set a deficit budget blame local officials for their problems - their anger and frustration is levelled squarely against the Government. Gillian Shephard's promise of jam tomorrow holds little consolation.
Newbold had been allocated a standstill budget of Pounds 2.4 million by the local authority, but with no help for the increase in teachers' pay. Mick Redman said the governors felt they had no choice but to go. "The unfortunate thing is the local authority has been left picking up the pieces - even though it is also in a dire situation. But what could we do when we were faced with trying to safeguard teachers' livelihoods and enhancing standards for the pupils? If the Government carries on like this it will have a job trying to fill vacancies on governing bodies."
Governors at New Bolsover Primary, also in Derbyshire, had financial control removed after refusing to set a budget which was Pounds 24,000 less than they felt was needed. The shortfall would have placed at risk one-and-a-half full-time equivalent teaching posts.
Chairman Steven Dilks said: "We actually moved 37 desks into a classroom to see how many children we could cram in. It couldn't be done without the pupils literally sitting shoulder to shoulder.
"We had to define our role precisely. Was it to maintain good standards of education at the school or act as ruthless accountants? Once we found there was a conflict we knew it was time to divorce one from the other and do what we thought was best for the children.
"What we want to know, and what no one at Westminster seems able to tell us, is why other authorities have a standard spending assessment of up to Pounds 250 per pupil more than we have in Derbyshire?
"The whole thing makes me very angry. Governors have been given powers to run schools to the best of their ability for no pay. But at the first sign of trying to govern in difficult circumstances, those powers are removed."
David Thomas, chair of governors at St Edward's RC Primary in Coleshill, Warwickshire, said he believed the dilemma faced by governors - and their subsequent actions - had shocked the Government. Governors at St Edward's lost their delegated powers at the end of April after setting a needs-related budget of Pounds 275,600 - more than Pounds 15,500 higher than the LEA allocation. "We take exception to claims we are setting 'illegal' budgets. This is money we believe we needed to spend to maintain a good standard of education. It is a moral issue not a legal one."
Governors at The Willows Junior and Infant School in Stratford-on-Avon, who have lost their delegated powers, have avoided job losses, but savings will have to be made through good housekeeping and fund-raising. Money set aside for an extension to the school hall will be used for something more pressing.
Will Clare, vice-chairman of the governors, said: "There is a feeling of extreme sadness, sorrow and sheer frustration. We wanted to retain our delegated powers but if we had given in where would it have ended? It is like telling someone they must have a finger cut off but they should not worry because they have nine good ones left. But what happens when they have to have another cut off next year, and the year after?"