Teachers face a pay shake-up with greater linkage of income to performance, under proposals sent by the education secretary to the School Teachers' Review Body.

"Pay progression should be linked to greater challenge for the individual, on the basis that increased public spending should purchase a more effective contribution from each member of the workforce," she said.

Unions are dismayed at plans for greater pay flexibility, special rates for key subjects and Estelle Morris's focus on performance pay structures borrowed from the private sector.