The decision to appoint KPMG as consultant for Liverpool after last week's critical Ofsted report was made by a joint DfEE/council panel. In previous cases such as Hackney or Islington LBCs the decision has been solely the education department's.
In addition, a joint DfEE/council steering group is working with KPMG as it considers a range of options including outsourcing and partnerships.
Executive member for lifelong learning Paul Clein said the development signalled a new approach from central government.
He admitted the council had underspent on the standard spending assessment in order to lower council tax and reverse a population decline in Liverpool, but said plans had already been made to spend the full amount next year.
Director of education Frank Cogley said: 'These days, with the changes in the law and increased powers held by the secretary of state as well as at local level, it's an entirely proper way to work.
'Privatisation has not been spelled out as a policy. We want to look at a range of options.'
The DfEE said: 'We don't want to see a situation where LEAs aren't providing a service. If the joint system works well we'll certainly be promoting it.'
The Local Government Association said: 'This is a far more positive approach by the government to what is a very difficult area. Sending in consultants who do not have as much experience as people within local government itself is not the right approach to transform Liverpool.'