It is just nine years since the first commercial teacher supply agency appeared. Chris King, who dreamed up the idea in 1989 with two colleagues over a pint in a pub in Islington, north London, pulls a letter from his file, written not long after Timeplan began. “What you are doing is mercenary, distasteful and bordering on the unprofessional,” it said.

That view, from a deputy head, was typical. Agencies were seen by many teachers, the unions and local authorities as nothing more than parasites, leeching off the state system for private profit. The commonest reaction, says Mr King, who spent several years teaching in London, was that the idea simply would not work.

Clearly it has. Timeplan, which started off in a single room in the backstreets near Finsbury Park station, now operates from eight offices throughout Britain, and expects to supply teachers to work approximately 40,000 days this year. It is one of 60 agencies offering supply staff to schools - and the sector is continuing to mushroom. Headteachers, says Mr King, are turning to the commercial sector where previously they dealt with their local authority.

“We’re providing an efficient employment management service that heads increasingly want to make use of,” he says.

“We’re here to stay.”

Today, the old battles over the agencies’ right to operate are fading rapidly. They provide a fast, efficient service, their supporters say, providing schools with teachers suitable for the individual school and the specific subject to be taught. Typically, they enable hard-pressed heads to cope with the peaks and troughs caused by sickness, staff quitting mid-term or mid-year, and seasonal rises in pupil numbers.

And, the agencies argue, they are much more efficient than a single local authority acting on its own. A regional office of one of the larger operations will recruit from a wide geographical area and deal with dozens of schools in several authorities. The economy of scale involved means they can provide a much better-tailored service than in the old days when each local authority held its own list of approved supply staff.

As the agencies have grown, so local authority supply pools have withered. The reasons are easy to trace. In the case of Timeplan, the Inner London Education Authority was about to be abolished. Plans by the boroughs to set up supply services were, recalls Mr King, non-existent. There was an obvious need for an alternative.

At the same time, there were reforms such as the local management of schools and tighter spending restrictions. Schools were given a new freedom to spend their own budgets as they wished. Spending by authorities on centralised services was being reined in. The time was right for entrepreneurs to step in and offer a commercial supply service.

Nine years later, most people agree that, on the whole, the agencies provide a useful service. Stephen Byers, the minister for school standards, in a recent spat over whether local authorities should co-operate with agencies by checking supply teachers’ records with the Department for Education and Employment, made it quite clear where the Government stands. “We believe that governing bodies have a right to use the services that they feel provide the best quality and value,” he said. “They may engage teachers from agencies, as as long as they have evidence of the necessary checks being conducted by the agencies and confidence in the quality of the teachers being supplied. LEAs may offer advice to schools, but should not obstruct schools’ use of agencies.”

The National Union of Teachers was once one of the fiercest opponents of commercial agencies - it fought a High Court battle with Timeplan, claiming that teachers were employed by local authorities and therefore had to be paid according to national pay scales. It lost that argument, but succeeded in a separate argument over its right to ask its sister union in New Zealand to boycott the company’s recruitment advertising.

The union now concedes that agencies do a good job. “We accept that agencies often provide a more efficient service for schools than did the local authorities,” says Steve Sinnott, the NUT’s deputy general secretary. “That is what people organising supply cover in schools say. In the past, they had to make perhaps 50 phone calls when they needed supply cover; now they make just one.”

But the NUT and others remain suspicious, concerned above all that the agencies undermine the terms and conditions of the profession by undercutting nationally agreed pay rates, weakening the professional status of teachers and reducing their rights at work.

“We believe in public service,” says Mr Sinnott. “The motivation behind the provision of services like supply teaching should be the public good, not private profit. When the motive is profit, the educational and welfare of the children is put at risk.”

Others regard that stance as merely dogmatic ideological opposition to the workings of the free market. Nevertheless, the NUT and the National Association of Schoolmasters and Union of Women Teachers have reach-ed an agreement with a handful of agencies that they will pay teachers in line with national agreements: about pound;110 a day.

The question of cost is, of course, crucial and, together with quality, will ultimately determine the agencies’ fate. Some heads complain that, with the agencies’ cut added to the basic fee, they are too expensive. They prefer to use their own tried and tested supplies. Timeplan has held out against meeting the national agreements. It reckons about two-thirds of its staff are paid below the rate. It argues that this is a question of supply and demand. Heads will not pay more than a certain rate, says Mr King, and there are plenty of qualified teachers - many from Australia and New Zealand - who are willing to work for Timeplan’s pound;87 or pound;92 a day.

In contrast, Jim Williams who helped run Liverpool ‘s supply pool before taking redundancy to set up Educational Supply Services, one of the union-approved agencies, has cut his profit margins to be able to pay the national rates of up to pound;110 a day - pound;120 in inner London.

“We are the Marks and Spencer of the supply agency business,” he says. “We offer value for money using the best quality teachers.”

But whether quality is consistent throughout the sector is another reason for continued opposition. A string of horror stories has appeared over the years suggesting that, as in other parts of the private employment sector, the inexperienced and the cowboys are capable of wreaking havoc.

Not long ago an agency in Hampshire was reported to have folded leaving dozens of supply teachers with unpaid wages totalling thousands of pounds. Another - spotlighted by the Labour MP, Margaret Hodge, while attempting to introduce a Bill to regulate employment agencies - was run by someone named on the Department for Education’s List 99 of barred teachers. Another was allegedly run by a man with a mobile telephone from the back of his van.

In a largely unregulated sector the opportunities for malpractice are rife. Stories such as those above, coupled with uncertainty over the employment status of agency staff which could be affected by forthcoming European legislation, have prompted the department to review the 1973 Employment Agencies Act. A report is expected later this year.

One of the most likely outcomes is the establishment of a register of recognised organisations, a move favoured by some agencies including Timeplan and ESS. It would mean regular inspections, possibly by the Office for Standards in Education. Many agencies have already joined the Federation of Recruitment and Employment Services, which operates a professional code of practice, in an attempt to maintain standards.

It is unlikely schools will radic ally alter employment patterns by using large numbers of supply teachers to supplement a smaller core of permanent staff, as has happened in further education because schools are on the whole much smaller organisations than colleges, with a more stable population and a less variable range of courses. They are also heavily reliant upon consistency in their approach to pupils.

But as a way of dealing with short-term staff shortages, agencies appear to have established a clear role for themselves. “The Government is saying it’s perfectly legitimate to use agencies,” says Ray Mercer of Capstan, another of the leading firms.

“Headteachers are doing what senior managers in every other sector do - using business services to solve their problems. Thedays when heads had to startringing round at seven inthe morning from a list of approved staff the local authority told them to use are over.”