Geoffrey Cooper, head of Weston Road high school, Stafford, said: “I had thought the worst was behind me. But we are about pound;100,000 short of the standstill budget. We will certainly not be able to implement the workload agreement and I believe redundancies are likely.”

Eric Dolling, head of Clevedon community school, North Somerset, expects to lose the equivalent of five staff this year because he is pound;61,000 short of where he was last year. “We are one of the innovative specialist schools that the Government wants to encourage but we are constantly in the bottom 5 per cent for funding,” he said.

Vincent Burke, senior vice-principal at the John Kitto community college, Plymouth, believes that the Government has not been totally honest. “It says it has increased spending on education and I cannot deny that. But it does not mention the amount of money needed by schools to stand still.” His school is facing a pound;313,000 shortfall and will save money through eight voluntary redundancies. The bulk of the shortfall, pound;180,000, was caused by staff cost increases, he said.

David Hart, National Association of Head Teachers general secretary, said changes to the local government funding formula had created new losers. And the Government had underestimated the increases in pay, national insurance and pension contributions, adding up to 10.5 per cent.

John Dunford, Secondary Heads Association general secretary, believes the government funding rise of 11.6 per cent should have been enough to cover the rise in costs. But the money was not distributed evenly between schools.

“It makes it very difficult to decide whether it is the Government or the LEAs who are to blame,” he said.