Cabinet ministers were convinced that approving pay increases averaging 4.1 per cent - well above the inflation rate of 2.8 per cent - would quell anxiety over changes to the way that pay is assessed.
But ministers faced a backlash after they revealed sweeping changes to teachers' pay, which will be linked partly to their pupils' exam results for the first time since the Victorian era, as part of moves to end the old system of pay increases across the board for the public sector.
A revolution in NHS pay scales is also being planned by Frank Dobson, the Health Secretary, who will publish proposals for consultation "very soon" to allow more flexibility in NHS pay. This also could include performance- related pay. "It is not just for teachers. You might bring the same idea to hospitals," said the Prime Minister's official spokesman.
There was anger at the way rises are being targeted at high performers. Classroom teachers were still smarting at the news they will receive just 3.5 per cent this year while some heads will get 9.5 per cent.
NHS consultants were upset at their treatment while the pay deal was directed at the nurses. Trainee nurses will be given an increase of 12 per cent to encourage recruitment and end the nurse shortage, but many nurses will get 4.7 per cent.
Civil servants were also annoyed to discover a handful of high-flying Whitehall mandarins will receive pay rises of up to 10.5 per cent after their senior salaries review body said the awards should be made to "the very few" top civil servants "whose performance has been truly exceptional". At the same time "unsatisfactory performers" will not get any rise at all.
MPs, who are linked to civil service grades, will get 2.8 per cent, but that was lifted to 4.3 per cent with the second stage of an award held over from last year, raising their salaries from pounds 45,066 to pounds 47,008. Cabinet pay rises are likely to be held to the inflation rate of 2.8 per cent to encourage wage restraint in private sector boardrooms.
Teachers' leaders expressed anger at the plans, which go far further than any previous Government proposals for reform.
Doug McAvoy, general secretary of the National Union of Teachers, warned that industrial action was "nearer than it has been for many many years". He said: "Tony Blair is saying: `Take this now and wait for something better to come.' What this shows is the `better to come' is payment by results. There's nothing for teachers to wait for."
David Blunkett, the Secretary of State for Education, believes the changes will solve the recruitment crisis by rewarding the best teachers. "I welcome the teachers' review body's constructive approach to the need to reward good performance and I look forward to next year's exercise extending this approach to the determination of the pay of all teachers."
Teachers will be required to set targets for their pupils' performance in tests and exams each year in consultation with heads as part of the appraisal system to be introduced from 2000. Heads will assess how far the targets have been met, and then decide whether the teacher should move up the pay scale.
Those who reach the top of the ordinary pay scale will be able to secure an extra pounds 2,000 a year by taking a "test" to see whether they match up to demanding standards.
The new "threshold" test will be expected to show that they have a track record of good results in relation to their pupils' ability. Classroom observation, subject knowledge, the ability to keep order will also be taken into account.
Nigel de Gruchy, general secretary of the National Association of Schoolmasters Union of Women Teachers, said he was "very disappointed"."They are going to have to change the proposals or there's no agreement," he said.
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