They will be expected to take training courses outside term time, and some high- flying teachers could lose up to six weeks' holiday under proposals for the biggest shake-up in the teaching profession for 50 years.
Under the new scheme, announced by David Blunkett, the Secretary of State for Education, all teachers will be offered a new proficiency test. If they pass, they will break through the present pounds 23,000 pay ceiling for classroom teachers and could earn up to pounds 35,000.
Mr Blunkett wants to ease a growing recruitment crisis by convincing graduates that teaching is a career with a future. He said: "For the first time in years, a commitment to invest in and reward teachers in return for a new professionalism is on offer."
The National Union of Teachers, the largest teachers' union, said that the performance-related pay scheme smacked of "cronyism and discrimination". The union has threatened strike action if pay is linked to exam results.
About pounds 1bn will be spent on the scheme in its first two years: 2000 and 2001. The money will go to high- performing schools and individual teachers, and will depend, at least in part, on pupils' results. Some pounds 60m will be given to heads of schools that show a constant improvement in exam results to give as bonuses to their best staff.
The bulk will go to individual teachers and will depend on a tough new appraisal system. Heads will assess teachers' performance, based partly on pupils' results. External assessors will monitor decisions.
The paper insists, however, that this is no crude system of "payment by results".
Those who pass the test will receive an immediate pay rise of 10 per cent - up to pounds 2,000. Mr Blunkett said that he expected most teachers would eventually qualify. At present just over half of the 440,000 schoolteachers are at or below the pounds 23,000 pay ceiling.
All teachers will continue to receive annual cost-of-living increases and national agreements on teachers' working hours and holidays will remain.
Ministers are to consult on whether teachers who earn the extra money should have "different, more demanding contracts", but it is clear thatthese teachers will be expected to take training courses to update their skills outside school hours.
Fast-track graduates, who will reach pounds 23,000 in four or five years instead of the usual seven, will be expected to give up between four and six weeks of their holidays. They will also be used as "flying squads" to support failing schools.
There will be a new leadership scale for heads, who will be able to earn up to pounds 70,000 a year.
Doug McAvoy, the NUT general secretary, said: "Whilst a package of measures is needed to address the recruitment crisis the profession now faces, the Government's emphasis on payment by results through performance-related pay will not achieve that and will be rejected by the profession. Any PRP is open to cronyism and discrimination."
But Graham Lane, education chairman of the Local Government Association, accused teachers' leaders of being "dinosaur-brained". He said: "There are only going to be two people who like this: the Government and local government. No one else will like it. That probably means it's a good idea.
"We want the teaching unions to cast off any idea of strike action because it's a very good package for teachers. Most teachers want an exciting profession. If they want to be up with industry, their conditions of service must reflect it."
David Hart, general secretary of the National Association of Head Teachers, said that the proposals "deserve serious consideration". He said: "Goals cannot be scored by standing on the touchline. It is essential that teachers' organisations get stuck in and obtain a new pay structure which properly rewards the many good teachers in the profession."
Nigel de Gruchy, general secretary of the National Association of Schoolmasters Union of Women Teachers, gave the paper a guarded welcome.
n pounds 2,000 a year extra for good classroom teachers who pass tough appraisal
pounds 1bn for performance-related pay over two years
Schools that show consistent improvement to share pounds 60m in bonuses
Heads, backed by external assessors, to decide who gets more, based on appraisal
High-flying head teachers to earn up to pounds 70,000Reuse content