The proposals, which are intended to free public services from central government bureaucracy, would see workers given full control over how local services are run.
The co-operatives would be funded by government and would have to adhere to national standards but would be treated as contractors, enlisted to get results through whichever means necessary.
Shadow chancellor George Osborne described the plans as "the biggest shift of power from government to people since the right to buy your council house in the 1980s".
But Mary Bousted, general secretary of the Association of Teachers and Lecturers, said the Conservative's "curious" proposals misunderstand the principles of the co-operative movement and the views of education professionals.
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