ROME (Reuters) - Prime Minister Matteo Renzi unveiled long-delayed education reforms on Thursday that he said would raise the quality of sub-standard schools which are often blamed for Italy's weak economic performance
The wide-ranging bill aims to increase the powers of head-teachers in staff promotion and management, reduce class sizes and, from 2016, offer pay increases based on merit rather than just seniority.
"This is the key reform for our country and we are convinced and proud of it," Renzi told reporters after the cabinet backed the legislation which will now begin its passage through parliament.
The Bank of Italy and international bodies say the state of Italy's education system carries much of the blame for more than a decade of growth and labor productivity stagnation.
Italy spends less on education as a proportion of national output than all its main peers in the euro zone, according to Eurostat data, and has one of the region's highest school drop-out rates.
Only 56 percent of Italians aged 25-64 have a high-school degree, below the average of 75 percent among countries in the Organisation of Economic Cooperation and Development, and Italian students come near the bottom of OECD league tables measuring basic numeracy and literacy skills.
Renzi pledged to hire around 100,000 teachers on permanent contracts by September, many from the army of supply teachers that schools currently depend on, increasing permanent teaching staff by almost 10 percent.
"For the first time we are spending more on schools instead of cutting," he said.
But critics say Renzi should have done more to reward merit, such as by abolishing the current seniority-based system of pay and career progression altogether.
Thousands of students marched through Rome and Milan on Thursday, protesting that the reform leaves Italy's state schools under-funded and offers unjustified fiscal incentives for private schools.
The government has set aside about 3 billion euros in this year's budget to fund the education reform, which was originally planned last August but shelved to allow more time for consultation with experts and the public.
The reform introduces obligatory work experience programs for high-school students and also requires schools to publish online their balance sheets and the curriculums of staff.
Supply teachers had hoped the permanent new hires would be enacted by emergency decree, rather than making them subject to a lengthy and sometimes unpredictable passage through parliament.
Additional reporting by Isla Binnie; Editing by Andrew Heavens