They performed a last-minute U-turn on plans to transfer additional support needs teachers from country schools to a new special needs unit at Gressy Loan in Lerwick.
After widespread protests from parents and teachers, they unanimously reversed a decision they took in January.
The move means that the islands council will have to fork out another Pounds 500,000 from its reserves to balance the books in the current financial year.
Council officials warned that the costs would rise even further over coming years as the number of pupils requiring extra support was increasing dramatically, a trend which officials say could not have been foreseen in 2002 when the matter was first discussed.
At the full council meeting, councillors apologised for not realising what they had agreed to at a meeting on January 28, but stopped short of accusing education officials of misleading them.
Five months ago, councillors approved proposals to staff the new special-needs unit, due to open at Gressy Loan in two months, by relocating existing teachers and auxiliaries from rural schools, not realising this would reduce existing services outside the town.
It only came to their attention when unrest broke out after education officials started telling teachers to relocate to Gressy Loan.
Councillor Brian Gregson said: "I have to put up my hand and admit that I didn't make the connection between resources and people." His colleague, councillor Leonard Groat, added: "I was naive. I thought great, we are getting Gressy Loan, without thinking about the impact."
Councillors authorised a further pound;500,000 to be used from the SIC's reserves to fund the status quo and employ new staff. The decision will increase the current hole in the council's budget to around pound;4.6 million.
The additional cost is expected to rise to pound;660,000 in the 200607 financial year.
The original report on a new unit for secondary pupils at Gressy Loan stated that it would be staffed from within existing resources, in accord with the best- value review being undertaken at that time. Subsequent reports from officials on ASN drew councillors' attention to the difficulties of having to transfer staff from rural locations to Lerwick, to stay within existing resources. But the decision to staff from within "existing resources" was not reversed - until last week.
Councillor Sandy Cluness, the council convener, assured parents that the council was fully behind the needs of pupils. "We are determined to make this happen, whatever happens," he said.
Councillor Drew Ratter said he supported providing comprehensive additional needs support to country schools, but warned that the decision was not going to make things easier for the council financially.
"This is an expanding area and this council is not addressing the bigger picture," he said. "We have more schools per capita than anywhere else as well as a declining school roll, and we don't do anything about it."
Alex Jamieson, the director of education, defended his staff, who had come under pressure from councillors.
He said the size of the problem could not have been anticipated when the initial decision to build Gressy Loan was first made in July 2002. The decision to transfer staff without any extra expenditure was later made in the light of the financial constraints the council's pound;35m education budget faced.
And he told the meeting that further resources had to be found to provide education for pupils with special needs, as the number of eligible pupils was rising.
"The level of need has increased by 100 per cent compared to two or three years ago," he said. The number of pupils with acute needs being attended to in schools outside Lerwick had risen from 22 in 200304 to 43 in 200506.
Jim Rayner, education officer, added the reason for the dramatic increase was that autism was on the rise throughout Scotland.
After the meeting, Mr Rayner started drafting job advertisements for the Gressy Loan unit and redrafting letters to staff across Shetland notifying them that they could continue working in their schools.