Last-ditch efforts will be made to stop the Government implementing a below-inflation pay rise which could spark the first national teachers’ strike in 20 years.

The announcement about pay, expected to be made in Parliament next week, will be well below inflation, setting a precedent for other public sector workers.

Ed Balls, the Children, Schools and Families Secretary, is required to consult the teacher unions before setting the pay settlement in stone.

The two biggest teacher unions are threatening moves towards strike action as they attempt to win a rise that at least keeps pace with the retail price index inflation - currently at 4.3 per cent.

The anticipated low increase would be a blow to teachers’ morale at the start of 2008, a year in which they face the biggest curriculum changes since 1987. Mr Balls helped the Treasury set a “soft cap” of 2 per cent on public sector pay, designed to stop inflation spiralling. Unions fear that he will try to force pay beneath that cap by implementing the rise gradually. They will use the four-week consultation period to try to weaken his resolve.

Teachers will highlight the “rank hypocrisy” of MPs preparing to vote themselves an average annual rise of 3 per cent while trying to cap teachers’ pay at 2 per cent, according to Mary Bousted, general secretary of the Association of Teachers and Lecturers. “Teachers would be enraged if Labour MPs awarded themselves a self-indulgent pay rise while denying teachers a decent standard of living,” she said.

Hafiz Qarni, a 26-year-old maths teacher at the Wavell School in Hampshire, said he would be willing to walk out on strike. He and his wife were not able to make ends meet, he said, despite tutoring privately in the evenings. He is contemplating moving to Qatar or the United Arab Emirates for work: “There, teachers are respected and rewarded,” he said. “Here, teaching is not good value for money.”

Teachers’ living costs will increase at about double the rate of their pay for as long as inflation remains at its present level. Alan Johnson, the previous education secretary, had assured teachers that inflation would drop to 2 per cent by the end of 2007.

The Government has already announced a tight school funding round, which will provide about 5,700 schools with only a 2.1 per cent funding increase - not enough to pay for increased heating costs, let alone a significant boost in teachers’ pay.

Andy Inett, from Local Government Employers, said even a pay rise of 2 per cent would be “at the limits of affordability” for many local authorities.

Yet most schools have done better from this three-year funding round and, over the past 10 years, teachers’ pay has risen faster than that of most public sector workers. A strike would startle the Government because there has not been a national walk-out since 1987.

But Britain’s biggest teaching union, the NUT, said it was set to formally ballot members for strike action if Mr Balls announces a below-inflation pay rise. Steve Sinnott, the union’s general secretary, said: “A strike would be justified in protecting the living standards of teachers and their families, and in protecting teaching standards.”

The NASUWT said if the award was 2 per cent or below, it would poll members about pursuing industrial action. Chris Keates, its general secretary, said such a small pay rise would wipe out all the gains in teachers’ pay and recruitment “at the stroke of a pen”.