A significant overhaul of Italy’s education system is set to be approved on Thursday in a victory for the prime minister.

The measures aim to modernise a schools system that is highly unionised, resistant to change and poorly funded so that it can foster a higher-skilled workforce and managerial class.

At the heart of the government’s plan is a measure linking teachers’ wages to merit rather than seniority, representing a dramatic shift in a country whose labour market suffers from a lack of meritocracy.

The new rules also seek to give schools more independence in setting curricula and managing operations, and give teachers and heads greater responsibilities.

The education bill has been high on Matteo Renzi’s agenda since the former mayor of Florence rose to power in February 2014 with an aim to renew staid economic and political systems.

In his first speech to parliament he said the new legislation would be “the engine” of national development.

But the package, to be put to a final vote in the lower legislative chamber where Mr Renzi can count on a majority, has encountered fierce opposition inside and outside parliament. At the end of June the coalition government called a confidence vote to ensure its passage in the Senate, in the process bypassing more than 2,600 amendments from other parties.

“Renzi paid a heavy political cost for it, considering that any economic benefits will only materialise in the very long run,” said Federico Santi of Eurasia Group, a research consultancy. Teachers, whose unions oppose the law, are a key constituency for Mr Renzi’s Democratic party, he said.

“It comes at a time when Renzi is especially vulnerable due to a combination of other factors, from immigration to . . . disappointing regional election performance, with many arguing education should not have been a priority,” added Mr Santi.

Unions complain the government pays little attention to their views and object to much of the reform’s content and have called for protests throughout the summer.

Teachers say a new method of allocating funds, based on performance, will favour private schools and those in high-income areas at the expense of the poorer ones. Many oppose the evaluation system to which they will be subject under the new system.

But Davide Faraone, undersecretary for education and a main architect of the reforms, has blamed a “high level of corporatism” — a byword for the power of interest groups — in the schooling system for the “very few steps forward” in recent years.

“All the reforms we are doing are creating opposition,” said Mr Faraone. “The country seems condemned to conservatism but the government’s spirit is to not be stopped by it.”

Student organisations have also voiced dissent. “The government is completely deaf towards those who really want to change schools. They cannot be reformed with a dictatorship of the majority,” said Danilo Lampis of the Union of Students, which rallied in front of parliament this week.

The reform, known as Good Schools, also includes permanent positions for more than 100,000 temporary teachers and new investments in the sector worth €3bn.

Tommaso Agasisti, professor of public management at the MIP Politecnico of Milan Graduate School of Business, praised “new elements” in the law such as the move towards meritocracy and “a greater autonomy [for schools] rather than centralising the system”, which would lead to “greater efficiency”.

However, he raised questions over the methods of implementation.