The National Union of Teachers says the scheme will turn teachers into "informers", leading to a culture of snooping, distrust and favouritism in schools.

It applied for a judicial review over the government's handling of the regulations, arguing that late changes to the legislation that introduces the system have not allowed the required period of consultation.

On Wednesday, a judge gave the go ahead to the union, ruling there was an arguable case which should go to a full hearing.

'Warning to government'

Under the performance pay system, which came into force at the start of April, teachers are being given the opportunity to get an immediate cash bonus of �2,000, and access to a higher pay scale, if they pass through a quality "threshold".

Teachers will be assessed to see if they fulfil a range of different criteria to pass through this threshold.

The NUT is concerned that as well as head teachers and external assessors, other members of staff will be expected to comment on the suitability of a colleague for an increase.

Its general secretary Doug McAvoy has accused the government of using the scheme to give heads the power to tell teachers to spy on other members of staff.

He said the judge's decision to allow the judicial review to go ahead was a "significant victory" and a warning to the government.

Timescale

But he said he regretted that the union had been forced to resort to the law in a bid to obtain full and proper consultation on the issue.

"The judge clearly sympathised with the problems faced by teachers," he said.

"Unlike the government he described the proposals as dispiriting and wondered why anyone would want to be a teacher.