Mrs Law said a circular had been sent to schools explaining the policy. The move followed a Post report on the confusion at schools.

'As a matter of policy, older staff are expected to retire at 60 and schools have to plan staff succession on this basis,' she said.

Schools can apply to extend their services if they can prove retiring staff are still in good health, capable of good performance and that they have difficulty finding replacements.

'We will allow schools until March 1 to submit applications and they can expect our verdict by the end of March,' Mrs Law said.

The row erupted last June when then director of education Helen Yu Lai Ching-ping asked school staff over 60 to retire 'to help solve the unemployment problem'.

Last year, 170 teachers and headmasters fought to extend their terms but most were turned down. It reversed the usual practice of granting exemptions and sparked a series of protests.

Hongkong Subsidised Secondary Schools Council chairman Stephen Hui Chin-yim said he would fight for the right to keep older staff.

'The department should respect the schools' decisions. It is what the department's school-based management scheme is for. It says schools should enjoy more autonomy so it should let them decide the staff they want to keep.' Hongkong Association of Heads of Secondary Schools chairman Michael Wong Wai-yu said: 'A school board knows better than the department whether staff should continue working.' An unprecedented territory-wide discussion is to be launched on education development and reforms. The Education Commission will hold a forum on Monday over which Chief Executive Tung Chee-hwa will preside.