This thesis examines from an historical perspective the series of events between 1995 and 1999 in which the public school teachers’ union, the New South Wales Teachers federation, challenged the NSW and Australian government’s provision of funding to private schools. Such funding is known colloquially as state aid. The state aid struggle is conceived in this thesis as an industrial relations contest that went beyond issues simply of state aid. The state aid struggle was a centrepiece of the Teachers Federation’s broader challenge to government’s intensification of efforts to reduce the federation’s effectiveness in shaping the public school system’s priorities. This thesis contends that the decisive importance of the state aid struggle arose from the fundamental strategy used by governments to lower the cost of schooling over time. To achieve this they undertook the state aid strategy – cost reductions would flow from residualising public schools, de-unionising teachers and deregulating wages and conditions. The state aid strategy was implemented through those areas of policy and funding over which the Federation had negligible control or where the Federation’s membership was disunited. The Federation was undermined by governments using policy initiatives to fragment teacher unity. By the end of 1999, governments’ prosecution of the state aid strategy did not seem to have been diverted from the main thrust of its course by the federation’s struggle. / Doctor of Philosophy (PhD)