A council is planning to fine schools £21,000 for every child who is excluded.
Conservative-run Devon County Council believes it could raise more than £5m a year under its plan to tackle massive extra spending in education.
According to a council report, the scheme was designed to “encourage schools with high exit rates to find every possible way to keep children and young people in school”.
Liberal Democrat councilor Alan Connett said schools needed “final approval” without risking financial penalties. The council has been contacted for comment.
The county council is predicting that 247 children will be excluded in the 2024-25 school year.
If it does and a levy is introduced, fines could be just under £5.2m.
Connett said: “Headteachers need to get final approval for children who are persistently disruptive.
“Fining schools £21,000 for leaving a child is not helping the school and not helping the child.
“This is yet another example of the chaos that is currently going on at Devon County Council regarding all things to do with children.”
The council has been hit by growing financial problems in children’s services and has amassed £163m in debt.
It was to be dealt with by a £95 million government bailout agreed in March but It emerged in November The council had already spent more than £15 million.
Projects are part of one. Consulting on funding of schools which is due to end on Tuesday.
Devon County Council has not yet responded to criticism of the plans.