A special pay deal for inner London teachers involves incorporating the current allowance into a new, separate pay scale.

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The Education Secretary, Charles Clarke, called this a "bold, far-sighted move".

There is to be an overall rise of about 4% on the main pay scale.

For most teachers, with five years' experience, the salary rises from �25,746 plus an allowance of �3,105 - totalling �28,851 - to �30,000.

Extra payment doubles

Good, experienced teachers can apply to cross a performance-related "threshold" which has been worth �2,148.

London's pupils deserve high standards and our schools need to attract and retain senior and talented teachers Education Secretary, Charles Clarke

For those in inner London that jump will now be worth what Mr Clarke called "an eye-catching" �4,002, almost twice as much.

The second performance pay point on the upper pay scale rises by two-thirds, from �1,000 to �1,670 - although achievement of that has proved a contentious issue, with ministers demanding teachers meet "increasingly challenging" targets.

This is aimed at tackling the problem of good teachers being tempted to leave London because their standard of living could be much higher in other parts of the country.

Pay for head teachers, deputies and assistant heads will go up by between 6% and 10%, which the government says is worth �4,000 on average.

'Good for everyone'

The Education Secretary, Charles Clarke, Charles Clarke, said: "We are serious about raising standards in London schools.

"This pay award provides significant pay rises for all London teachers.

It will lead to real dissension and contradictions between one school and another Union leader Eamonn O'Kane

"London's pupils deserve high standards and our schools need to attract and retain senior and talented teachers.

"These measures will help heads, teachers and pupils."

Charles Clarke said the separate pay scale for London marked "a prudent first step" towards localised pay - something the government is keen to see.

The unions are not happy.

Eamonn O'Kane, general secretary of the National Association of Schoolmasters Union of Women Teachers said awarding London teachers higher performance bonuses than were available to their colleagues in other areas "could be a very dangerous precedent" as it threatened the national pay structure.

"It will lead to real dissension and contradictions between one school and another.

"It is simply shifting the problems around from school to school and area to area."

Strikes reconsidered

Mr Clarke also welcome the increased pay for inner London school leaders.

"Top heads in inner London can now be paid �94,000 - and potentially over �100,000 with discretionary payments," he said.

Teachers' unions have been on strike in a demand for higher London allowances and had threatened to do so again.

The NUT had called calling for inner and outer London allowances to rise from �3,105 and �2,043 to �6,111 and �4,500 respectively.

It also wanted the "fringe" payment for outlying boroughs to increase from �792 to �2,500.

On Friday a spokesperson said the union would take time to consider the implications of the new arrangements before deciding whether to go for more industrial action.

Help for councils

The increases would have caused problems for local authorities.

So the government is putting "some �25m to �30m" into supporting the extra that teachers get once over the performance threshold.

And there is to be a �10m grant for councils where Mr Clarke reckons there will be "real affordability issues".

Graham Lane, education chairman of the Local Government Association and leader of Newham council in east London, said some boroughs faced a multi-million pound budget shortfall in spite of the "cushioning" grant.

"The changes for pay in inner London are as bizarre as the criteria for allocating additional grant across London," he said.

"Any potential recruitment and retention problems are not restricted to inner London. This solution will create rather than solve problems."

The Department for Education says the inner London boroughs "likely to qualify" for special funding are Camden, Hammersmith and Fulham, Kensington and Chelsea, Lambeth, Barking and Dagenham, and Haringey.

Outer London boroughs that should get help are Bexley, Bromley, Croydon, Enfield, Havering, Redbridge, Richmond upon Thames, Sutton and Waltham Forest.

Teachers in the outer London and "fringe" areas of the South East will get the general pay rise of 2.9%.

Their London allowances will go up by 10% - to �2,247 and �870.

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London allowance areas:

Inner London

Barking and Dagenham
Brent
Camden
City of London
Ealing
Greenwich
Hackney
Hammersmith and Fulham
Haringey
Islington
Kensington and Chelsea
Lambeth
Lewisham
Merton
Newham
Southwark
Tower Hamlets
Wandsworth
Westminster

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Outer London

Barnet
Bexley
Bromley
Croydon
Enfield
Harrow
Haringey
Hillingdon
Hounslow
Kingston upon Thames
Redbridge
Richmond upon Thames
Sutton
Waltham Forest

Fringe

Surrey (all)
West Sussex: Crawley
Kent: Dartford, Sevenoaks
Hertfordshire: Broxbourne, Dacorum, East Herts, Hertsmere, St Albans, Three Rivers, Watford, Welwyn Hatfield
Essex: Basildon, Brentwood, Epping Forest, Harlow and Thurrock
Buckinghamshire: South Bucks, Chiltern
Berkshire: Bracknell Forest, Slough, Windsor, Maidenhead