Parents and teachers at a primary school have warned that they face a £20,000 deficit in funding during the coming financial year.
Governors at St Barnabas's CE First School, in Hart Street, Jericho, Oxford, could have to make a teacher redundant because it is so cash-strapped.
Members of the Parent Teachers Association are planning to warn county councillors about the crisis tomorrow and have also contacted Ministers David Blunkett and John Prescott.
PTA chairman Ms Erica Hedges, chairman of the St Barnabas PTA, said: "To maintain current high standards of care and education, our school can not sustain this deficit.
"Staff morale and our children's education are on the line." Education spokesman John Mitchell said a number of other schools in the Oxfordshire area were also facing similar financial difficulties.
Headteacher Mrs Hilary Hiorns added: "In the coming financial year, St Barnabas, like other schools in Oxfordshire, is facing a significant deficit in its budget.
"This comes as a result of five years of restrictions in public spending on education.
"We have already made all possible small-scale economies and now face the prospect of one less teacher and bigger classes.
"Oxfordshire is one of the most poorly funded authorities in England and our children deserve better. The governors, parents and staff are all asking for more money for education in Oxfordshire."
Story date: Monday 08 February
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