Government sources suggest Chris Woodhead, the controversial chief inspector of schools, has had his contract extended to 2003 and that his pay is likely to rise in line with salaries of other senior civil servants.
An official announcement was expected as The TES went to press although David Blunkett, the Education and Employment Secretary, refused to confirm the decision earlier this week. His reluctance to set out the terms of Mr Woodhead's re-engagement may be a reflection of the difficulties over the appointment.
Mr Woodhead, 51, appointed in 1994 with an Pounds 86,000 salary plus a 10.8 per cent performance-related bonus, is believed to have negotiated a significant pay rise, although reports of of #163;120,000 are likely to be exaggerated - a package that compares with that of a permanent secretary.
In an interview with Radio Four's Today programme, Mr Blunkett dismissed as "bunkum" reports that Mr Woodhead would receive Pounds 1 million over five years.
He said ministers were still deciding whether Mr Woodhead would be re-appointed as head of the Office for Standards in Education. "We are reviewing the next stage of OFSTED and we are in the process of deciding whether we should appoint Chris Woodhead as the head of that office."
There is irritation at what appear to be leaks about the appointment from sources outside the Department for Education and Employment.
The chief inspector's main duty is the maintenance of a reliable system of school inspection. Technically, he is appointed by the Queen on the advice of the Prime Minister, but in reality his fate is determined in major part by the Education Secretary.
Decisions already taken to scale down the frequency with which schools are inspected will inevitably affect OFSTED expenditure - and its influence. The major role in raising standards is now taken by the standards and effectiveness unit in the DfEE.
Dr John Dunford, general secretary of the Secondary Heads Association, condemned any re-appointment. He said: "Mr Woodhead puts forward a policy line which the Government adopts. He will then be responsible for monitoring that policy in schools."
Other union leaders were angry that he appeared to be getting a large rise when teachers were being told they must be pegged to 3 per cent next year.