THE Scottish Government has invited local authorities to borrow millions of pounds of public money to help fund early retirement packages for up to 500 teachers.

The scheme, which would see councils able to borrow from a fund of £10 million over the next two years, would see older staff being replaced by newly trained teachers looking for a job.

Fiona Hyslop, the Education Secretary, said the scheme would break even financially because local authorities would be replacing teachers at the top of the pay scale with those at the bottom.

However, the idea came under heavy fire from officials, of Cosla, the umbrella group for local authorities, who said the plan was “partially thought through and not what councils want or need”.

Political opponents also went on the attack, accusing the Government of “panic” in the face of a growing recruitment crisis for Scottish teachers.

Hundreds of extra teachers have been trained in recent years in order to meet political commitments to bring down class sizes – a key manifesto pledge by the SNP in 2007.

In order to deliver the policy, Ms Hyslop said local authorities had been given enough money to maintain teacher numbers in the face of falling school rolls.

However, many new staff were unable to find jobs and it emerged that councils with reduced rolls were scaling down teacher numbers to save money. As a result, the total number of teachers in Scotland fell from 54,559 in 2007 to 53,597 last year.

A survey this summer showed the scale of the problem, with two-thirds of new teachers failing to secure full-time permanent work in Scottish schools almost a year after qualifying. The situation is particularly acute across the central belt, where hundreds of trainees often compete for the same vacancy.

Ms Hyslop said the new move to encourage early retirement was designed to help as many new teachers as possible into jobs. “We are allowing councils to access money to support the up-front costs of early retirement for 500 teachers to enable them to recruit 500 new teachers,” she said.

However, Pat Watters, president of Cosla, said he was “dismayed” by the announcement. “This is not a Scottish Government scheme at all as they will put no resource into it – this is local government money with Westminster approval,” he said.

The Scottish Labour Party described the announcement as a “desperate attempt” to evade responsibility for the “shambles” of teacher unemployment. Des McNulty, the party’s education spokesman, said: “Despite the SNP manifesto commitment, the last census showed there are now 1000 fewer teachers in Scotland.

“The next figures, due out tomorrow, will reveal the situation has got even worse, which is why they has resorted

to panic measures.”

Liz Smith, spokeswoman for the Scottish Conservative Party, said: “It is a disgrace the Government is having to resort to this measure as a way of sorting out a huge mess of its own making.”

And a spokesman for the Educational Institute of Scotland, the country’s largest teaching union, called for “more firm” financial support.