The deal means most teachers can aspire to �31,602

The move is part of a deal aimed at resolving a long row over the funding of pay for good, experienced teachers.

If approved, it would mean the highest potential salary for a classroom teacher outside London dropping from almost �34,000 to �31,602.

But the unions say many more teachers would qualify for the money.

And there is to be further work on a new scheme to reward the top 20% of "excellent teachers", along the lines of existing "advanced skills teacher" grade.

The Education Secretary, Charles Clarke, said: "This draft agreement supports our commitment to providing certainty and affordability for schools, while ensuring that the highest rewards go to our best classroom teachers."

It was agreed with the local government employers and five unions representing the majority of teachers and head teachers - but not the biggest classroom union, the NUT.

Limit removed

The upper pay ladder for the best teachers has in theory had five points. The first people are due to reach the third level in September - and that is now the top rung.

But John Dunford, general secretary of the Secondary Heads Association, said the government was raising the money available from �30m to a total of �71m, so everyone whose performance merited the rise should get it.

The government had been trying to limit the numbers to 30% of those who were eligible.

Part of the funding would come from a freeze on management allowances.

"This agreement represents a workable solution to the previously intractable problems since the upper pay scale was introduced," Dr Dunford said.

The various parties had been told to resolve the matter by the independent pay review body, to which the draft agreement will now be put.

It has been asked to comment by 5 March.