UNION officials fear chaos in schools if Kirklees Council signs up to another huge contract with troubled company Jarvis.
The company have a £50m deal with the council to provide services - including caretaking and cleaning - at 20 schools.
But now a second deal - worth an estimated £25m - is being delayed because of Jarvis' financial problems.
There are worries the huge company could collapse.
Kirklees Council admit there are concerns and confirmed they would delay signing up to the new contract to provide services for new special schools, due to be built.
But council leader Clr Kath Pinnock said: "I think too much work has gone into the preparation of this contract to end it now."
Unison, who have up to 200 members working in schools where Jarvis operates, fear both for jobs and the future education of children at the special schools.
Four new schools are due to be built, including one at Newsome, and Jarvis are set to project manage the schemes as well as providing services once they are open.
Paul Holmes, of Unison, said: "We had doubts when Jarvis were signed up for the mainstream schools in the Private Finance Initiative and those were proved to be the case when there were delays in re-opening after building work.
"I dread to think what could happen to children who have special needs."
Clr Pinnock said there were concerns once the problems at Jarvis were publicised but she said it may mean only a delay in signing a contract.
She said the banks were guarantors for the first project and the council would look for similar guarantees if the second contract was signed.
"The Government have told us that the Private Finance Initiatives like this are the only sure way to get our schools improved.
"I certainly am committed to doing all I can to improve Kirklees' schools.
"There will be delays while Jarvis sorts out its problems but I do not think there will be another way."
A Jarvis spokesman said: "Jarvis will honour all its outstanding projects in the Private Finance Initiative area.
"We have a very good relationship with Kirklees Council. We do not intend to let the PFI deal collapse.
"The contracts are such that if there is a problem, we pay and not the council."