The unity government of President Robert Mugabe and Prime Minister Morgan Tsvangirai is struggling to pay workers as Western donors continue to withhold crucial aid, demanding authorities carry out wider political reforms first.

Education Minister David Coltart said school fees had been cut to between $5 and $20 a term in state primary and secondary schools, down from between $20 and $280 announced two months ago, which parents said were unaffordable due to low wages and high living costs.

In contrast, parents at private schools have to pay up to $3,000 per school term.

The new school term opened on Tuesday with teachers’ unions urging their members to report for duty after reaching agreement with government.

The Herald newspaper said the government and unions had struck a deal late on Monday which exempted teachers from paying fees for their children in state schools.

"Teachers will also be exempted from paying school fees for their children as part of their employment package," the newspaper reported.

Tsvangirai said last week the unity government was broke and could not meet union demands for higher wages. All government employees, including Mugabe and Tsvangirai, are paid a monthly allowance of $100.