Education spending could be cut by £2bn by axing thousands of teachers, according to schools secretary Ed Balls.
The cost-cutting moves have been described as Balls explained his theory to the Sunday Times.
Pupils would be responsible for self-regulating their education in a move that would mean smaller class sizes and fewer exams.
The New Labour proposals were described as "thinking out of his box" by PM Gordon Brown.
There has been a mixed reaction from teaching unions who were still trying to calculate whether axing teaching staff would mean they had to work fewer hours.
Asked to guess who had come up with the zany education programme, Conservative leader Thingy Cameron said, "That's total balls."
