The full council meets tomorrow to discuss the government's decision to restrict spending to £316m, £23m lower than the level needed to maintain current services. The meeting will be lobbied by parents, school governors and members of the National Union of Teachers and the NASUWT who are striking for half a day.
Conservative group leader David Walden told prime minister John Major at a private meeting on Friday that the government should fully fund the teachers' pay rise.
Speaking on Radio 5 Live Mr Walden said that while Oxfordshire Conservative group supported the government's general aim of restricting public spending, government should fund the rise because it had broken its own pay and budget guidelines.
Labour group leader on the hung council, James Plaskitt, believes the council will be justified in setting a budget £7m above its cap limit. He told BBC Oxford:
'We are justified because the settlement that the government has given Oxfordshire was unacceptably tough and we think there are good reasons for challenging parts of it.
'And, secondly, we do not believe it is right that two or three hundred teachers' jobs should be lost in Oxfordshire. That is not justifiable so we want to continue the struggle with the government for as long as we can, on behalf of the community.'