Elwa has dismissed the union's claims

It claims that ELWA, the education and training body, is not allocating enough money and that the shortfall could see up to 400 teachers losing their jobs.

The union says some schools may get �100,000 less than they were expecting.

But Elwa officials have dismissed the claims and said its settlement would see discrepancies between schools end.

NUT Cymru claim sixth forms have received a settlement it considers to be unfair and it could lead to a crisis for teachers and pupils.

It said all schools would receive the same settlement they had in 2003, as well as a 2.17% increase for inflation, which NUT Cymru secretary Gethin Lewis said would not even cover the "small increase" in teachers' salaries.

He said: "What is worse is that if there has been a drop in sixth form numbers in a school since September 2003, the formula allows for there to be a deduction in the amount which goes to the school.

"If, on the other hand, the school has the same number of post 16 students or even has seen a substantial rise in their number, no corresponding increase in funding is allowed.

The current funding system is inherently unfair Richard Thomas, Elwa

"In some schools this can mean that they will receive up to �100,000 less than they would otherwise have been expecting.

"In some local education authorities, this could mean the loss of 20 secondary teaching jobs. As there are 22 local authorities in Wales, the total of secondary job losses could ultimately number as many as 400."

Elwa has dismissed any talk of a crisis, saying the settlement will end any funding differences between schools which should create a "level playing field" in schools throughout Wales.

Richard Thomas from the agency said: "The current funding system is inherently unfair.

"The funding varies from �2,800 per pupil to �4,400 and that isn't fair.

"We are working towards a level playing field, eradicating the postcode lottery by July 2010.