Three pay rises that fail to outpace inflation will undo much-needed reform to teacher salaries in NSW and open the door for other states to leap ahead, a union says.

Amid an increasingly bitter pay dispute, the NSW Teachers Federation on Tuesday took aim at the state government’s offer for a series of 2.5 per cent annual pay rises after a larger initial increase in October.

The four-year deal would vault first-year teacher salaries by about 12 per cent from term four, above pay for their counterparts in Victoria, Queensland and the ACT.

But the teachers union said a proposed 2.5 per cent “wage cap” on rises in subsequent years had to be ruled out unless the government wanted to risk a worsening teacher shortage.

“We have more than 2000 vacant teaching positions across NSW,” acting president Henry Rajendra said in a statement.

“This will not be solved by a pay offer that is one step forward, two steps backwards.”

Mr Rajendra noted the teacher shortage was not created by the Minns Labor government, but it would not be fixed without an enduring commitment to lift wages.

Increasing wages for one year but following that with a 2.5 per cent annual limit would pave the way for other jurisdictions to leapfrog NSW, he said.

“This problem has been brewing for years and demands a robust commitment,” he said.

Negotiations broke down in July after the union said an in-principle one-year agreement was suddenly changed to an offer covering four years, including a three-year maintenance phase.

Premier Chris Minns this week said such a plan was always known from the government’s perspective and would ensure the new “nation-leading” salaries kept track with inflation.

Inflation is forecast by the Reserve Bank to fall back to about three per cent by the end of 2024.

The union had returned to the table and the “really positive” negotiations were continuing, Education Minister Prue Car told reporters on Tuesday.

She remains hopeful an agreement is in sight.

“We want to give teachers a huge pay rise,” Ms Car said.

“We have offered a generationally transforming pay rise for teachers … what happens after that first year is up for discussion.”

While most public sector workers have been offered a four per cent pay rise for this financial year, the offer for teachers lifts graduate salaries and adds more annual grade increases, meaning someone who enters the workforce in 2023 would be earning $105,000 by 2026.

Pay packets of top-of-the-scale teachers would jump eight per cent in the first year and 15.1 per cent over four years, taking them to $130,209.

The proposed reform comes off the back of the repeal of the previous government’s wages cap that prevented rises above 2.5 per cent without productivity increases.

– AAP