It’s a society in which a 19-year-old who has just matriculated from gymnasium - the academic upper tier of secondary school - can compare his results, subject by subject, with those of his grandparents. In central Helsinki stands a statue of Czar Alexander II, the penultimate Romanov ruler of Russia - something you would not find in Moscow or St Petersburg. Simo Juva, deputy manager of education and culture for the Association of Finnish Local Authorities, explains with a quiet smile.

“All the statues of the Czar in Russia were swept away with the revolution, but here he still stands. It’s a nice statue and dates from a period of reasonable relations with the Russians, and we’ve never seen a reason to tear it down.”

But behind this facade of comfortable conservatism, Finnish education is in a state that might be described as turmoil. The free-market ideology familiar to British educationists has started to bite in Finland, where the shock of the country’s most severe recession is beginning to sink in.

The phenomenal growth of the Finnish economy throughout most of the 20th century, which delivered a standard - and cost - of living among the highest in Europe, has been reversed by a recession which has been exacerbated by the collapse of the Soviet Union and the protected markets enjoyed there.

Unemployment is at an average 19 per cent - up to 40 per cent for the under-25s - and two devaluations of the Finnish Mark (FIM) since 1990 have seen real incomes tumble.

Last year, the 450 authorities in Herra Juva’s association - ranging from island councils covering a community of a few hundred with one tiny school, to Helsinki with its half-million inhabitants - found themselves in the unenviable position of arguing for a cut to teachers’ pay.

As pressures grew to reduce public sector spending and the unions resisted a direct pay cut, teachers were forced to take up to three weeks’ unpaid leave during term time. Larger schools had to drop subjects during the leave periods and smaller schools doubled their class sizes. In many areas parents refused to send their children to school in protest, and local politicians are having to rethink their approach for this year’s budget.

Central direction of the curriculum, for many years the sacred cow of the Finnish system, has also been challenged. A new, decentralised national curriculum outlines, in one slim volume, the goals and objectives required for core and optional subject areas for the nine years of compulsory education.

Even under the old prescriptive system, local authorities were responsible for drawing up the curriculum within the education ministry’s limits, and given a fair degree of latitude to encourage locally relevant syllabuses. Now that latitude is being extended to schools and pupils. However, Herra Juva warned that the new freedom for schools brings new responsibilities.

And he added: “It is interesting to note the contrast between Finnish education and English - we are moving rapidly towards decentralisation just as you are becoming ever more centralised.”

One of the recurring issues in Finnish education is the difficulties many pupils encounter when they move schools at 13. The lower- stage schools, which cater for seven to 13-year-olds - voluntary pre-schools are available for under-sevens - are frequently small, with high teacher:pupil ratios and wide variation in teaching methods. Upper-stage comprehensives tend to be more traditional, relying on talk and chalk.

Nearly half of the 3,450 lower- stage schools have just two teachers, and many are tiny, rural schools with fewer than 20 pupils. Children often travel long distances, although journey time is limited by law to a maximum of 2.5 hours for younger pupils, and three hours for older ones.

Secondary school certificates based on teacher assessments are awarded at 16: the only tests taken before 16 are those used by inspectors to evaluate standard of teaching - not pupils’ ability.

Those who stay on after 16 choose between a gymnasium or a vocational school, both of which offer routes to higher education. the Finnish equivalent of A-levels.are standardised matriculation papers, which include a compulsory paper in Finnish or Swedish - the two state languages.

Successful matriculation students are a familiar sight in the summer, sporting their traditional nautical student caps, but only a third of the annual output of 30,000 succeed in getting an over-subscribed university place on the first attempt.

Teachers’ pay and conditions have been under some pressure in recent years, but they still make a reasonably good living. Salaries are paid according to a complicated national formula based on agreed minimum classroom teaching time, with extra amounts for additional hours. Monthly salaries range from 8,000-12,000 FIM a month (Pounds 1,085 to Pounds 1,628) in the lower stage, to 15,000-18,000 FIM (Pounds 2,035 to Pounds 2,465) in the upper stage.

The system is egalitarian, with virtually no fee-paying schools. Its teaching of languages is internationally recognised - most educated people are fluent in Finnish, Swedish and English and anyone considered to be a linguist speaks at least four languages.