VITAL school services are under threat because the council has broken promises over pensions, according to education workers.

Dozens of staff, who have for years worked closely with schools in a range of areas such as finance, IT and human resources, warn that the education of thousands of children could suffer unless the long-running dispute is resolved.

The services were previously provided by the council, but transferred over to EduAction when it was brought in to manage schools in 2001.

Workers say they were assured their jobs would be taken back under council control when the contract expired in April this year.

Although this has happened to some, many have been told they will stay with the company and lose their right to contribute to the Local Government Pension Scheme (LGPS).

This is despite the fact that Secretary of State for Communities and Local Government, Hazel Blears, has decided all EduAction staff should be eligible.

Many workers were originally employed by the authority and some, who have been in their jobs for decades, say they are still on council contracts.

Although staff are full of praise for their current employers efforts to strike a deal, they feel cheated and abandoned by the council and fear they may be forced to accept a pension of significantly reduced value.

This, they say, will force many to seek employment elsewhere, which could have a dramatic effect on the day-to-day running of between 80 and 90 per cent of the borough’s schools.

Staff say the council delay is due to concerns over compensation the authority will pay for any potential fall in the value of the pension fund, which is also known as an indemnity.

One member of staff said: “As an ex-council employee and a subscriber to the LGPS, I just can’t understand what is going on here.

“If indemnifying the scheme is the real issue then why is it that no-one has come forward with an explanation?.”

He went on to question why the local authority guaranteed the pensions of 100 teaching assistants, who were transferred over to EduAtion when its contract was renewed in 2006, but cannot do the same for the remaining 50 staff.

A council spokeman said: "We continue to work with our partner agencies to address these concerns."