SCHOOLS across Waltham Forest are being encouraged by the council to go thousands of pounds into the red - prompting fears of redundancies and reduced spending on books and equipment.

Financial adminstrators who are preparing to submit school budgets next Friday (22) have been ordered to backdate pay rises to all support staff in order to comply with new government rules aimed at tackling public sector pay inequalties.

But the council will not know whether the government will approve loans to schools to cover the massive cost until October, so the authority has taken the highly unusual step of encouraging schools to tap into reserves or go into deficit if necessary.

The council would usually come down hard on any school which went into the red and school bosses are worried about the consequences.

Justin James, headteacher of Barclay Primary School, in Canterbury Road, Leyton, said: "The council has not secured the money yet, and we can't say for certain what the hit for schools is going to be.

"If you ask me whether I am nervous, yes I am."

A school governor, who did not wish to be named, told the Guardian there was a great deal of anger about the fact schools were not notified earlier that they would be required to backdate pay rises.

Amy Hoare, headteacher of the voluntary-aided St Saviours School, in Verulam Avenue, Walthamstow, is already seething over a lack of promised funding for an expansion.

She said: "We have been lucky, we have been able to meet as a group of church schools and act together to minimise the impact of this on our school's bidget.

"But other schools have been seriously affected."

Single Status was intended to ensure fair and equal pay in the public sector. The second phase of the agreement ensures equal pay for all non-teaching staff, including teaching assistants, administrators and learning mentors.

A council spokesman said schools are not being actively encouraged to go into the red, but it is something schools may need to consider.

He also said that schools have been given plenty of notice about the need to pay backpay.