Deputy Prime Minister John Prescott launched a consultation paper, which also proposes cash grants in areas where house prices are rising quickly. Interest-free loans would cut mortgage repayments and give teachers a wider range of properties from which to choose. Applicants would have to prove that prices in the area were excessive and that teachers were in short supply. Reports had suggested that those eligible could get an interest-free loan of up to pound;50,000, but this figure was later dismissed by the Government.
The move comes hot on the heels of the announcement that trainee teachers will be paid a salary, and is ministers' latest attempt to tackle the growing recruitment crisis.
However, union leaders warned that millions of pounds could be wasted unless the salaries - which will be available only to graduate trainees - are made conditional on the trainee going on to become a teacher. Nigel de Gruchy, general secretary of the National Association of Schoolmasters Union of Women Teachers, criticised the scheme as a "sticking plaster, albeit of a more expensive kind than usual".
The Tories were also on the attack this week. At the Conservative spring forum in Harrogate, their leader, William Hague, said education was nowone of the key areas where the Tories could pick up votes. He argued that many people felt "betrayed" by Labour's failure to live up to its election promises.
Labour is also gearing up for the next election, with Cabinet ministers congregating at the Prime Minister's country residence, Chequers, to discuss their strategy. It is expected they will produce an updated version of their 1997 pledge card, which included a promise to cut class sizes for five to seven-year-olds. One potential promise, thought to be favoured by Tony Blair, is to make computers accessible to all children in the classroom.
It seems, though, that headteachers would rather the Government cut red tape. This week's report from the Better Regulation Taskforce - which reports directly to Downing Street - argued that headteachers should be freed from bureaucracy and given more power to run their schools.
The report says schools have too many forms to fill in and should send information to a single body rather than being required to send separate forms to the Department for Education and Employment, local education authorities and government agencies. The taskforce findings are understood to have received a sympathetic hearing from the Prime Minister.
The Government launched it's own report this week, setting out the future of school sport. A new pound;75 million fund will be set up to improve facilities in primary schools and the number of specialist sports colleges will be increased to 110.
Ministers also hope to persuade sports governing bodies to become more involved in education and require their star performers to visit schools on a regular basis.