Under proposals first mooted two years ago, Bristol City Council had been planning to pay £15m a year for six years to a specialist firm to help drive up educational standards in the city.
But following the early retirement of children's services director Heather Tomlinson in January, the plans were put on hold.
At a council meeting yesterday, new director Annie Hudson raised concerns that commissioning out services might not deliver better outcomes while tying the council into a financial commitment.
In a report presented to the council's children's services scrutiny commission, Hudson said: "The economic climate has changed significantly over the past year. It is likely there will be significant reductions in public expenditure.
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