With the city losing nearly $250 million in state school aid this year for failing to negotiate a new teacher evaluation system, Mayor Michael Bloomberg presented a fiscal year 2014 budget with deep cuts to education.

His proposed budget includes the elimination of 700 teaching and counseling jobs in the current school year, achieved by not filling currently vacant positions. It would shave another 1,800 positions through attrition in the 2013-2014 school year, along with significant cuts to after school programs.

Bloomberg said he was forced to take these actions.

“We’ve not walked away from education,” he said, noting that the city now spends $8 billion more annually on the public schools than it did when he took office in 2002.

To make up for the loss in state aid, Bloomberg said the city would use fewer per diem substitute teachers, reduce the schedules of school aides, and cut back on contracts for conflict resolution and bullying, as well as after school programs and professional development. He said the schools would be forced to eliminate over 700,000 hours of after-school programs in 2013-2014 including tutoring and athletics.

The mayor held firm in blaming the teachers union for “last minute roadblocks” that prevented the city from negotiating what he considered an effective teacher evaluation deal, and for losing the state funding.

“The suffering that we will go through is more than worth it to maybe finally get an evaluation deal that will let us only put the best teachers in front of our kids,” he stated. “There is nothing, nothing that we can do that is more important.”

But United Federation of Teachers president Michael Mulgrew issued a brief statement laying the blame on the mayor.

“Since it was Mayor Bloomberg who walked away from a teacher evaluation deal the city should ensure that the lost $240 million come from central bureaucracy and bloated contracts, not classrooms and instruction,” he said.

City Council Speaker Christine Quinn said she and her members have “serious concerns about the negative consequences reflected as a result of the absence of a deal on teacher evaluations. A further failure to strike a deal would be potentially devastating to our city’s students.”

The Democrat, who is planning a run for mayor this year, said the council would try to limit “excessive attrition of front line education staff.”

Public Advocate Bill De Blasio and City Comptroller John Liu, two other Democratic mayoral contenders, also criticized cuts to early education and after-school programs and called on the mayor and the union to reach an agreement to prevent the loss of state aid.

Childrens’ advocates were troubled, too. “Once again, the mayor’s proposed cuts to after-school and early childhood programs will continue a disappointing trend of shrinking programs for the children in our city who need them most,” said Richard Buery, president and C.E.O. of the Children’s Aid Society.

Bloomberg proposed eliminating a total of more than 40,000 early childhood and after-school slots last year which were eventually restored. But they were not continued in the new budget.

“The loss of 1,800 teachers would mean a sharp increase in class size; when our children are already suffering from the largest classes in 14 years,” said Leonie Haimson, executive director of Class Size Matters.

While Bloomberg presented his proposed budget to reporters at City Hall, Chancellor Dennis Walcott testified in Albany about the loss of state aid.

“We will be forced to impose the largest across-the-board cut to schools in over a decade,” he said of the total impact this year and next.

He predicted larger class sizes and increased responsibilities for the teachers who remain.

State Education Department Commissioner John King has also threatened to re-direct another $830 million in federal funds if the city and the teachers union don’t hash-out a professional development plan for the lowest performing schools by Feb. 15.

Both the union and the Bloomberg administration said they’re scheduling meetings aimed at reaching that February deadline.

But it’s unclear how they’ll find a middle ground when each side insists on a completely different interpretation of what constitutes an effective teacher evaluation system.

Bloomberg wants any teacher evaluation deal to last for more than two years. While testifying about the governor’s budget in Albany on Monday, he argued that anything less would be a “fraud” because it takes at least two years to remove ineffective teachers. The union agreed to a two-year deal and claimed the mayor was on board with that until the last minute. Most districts across the state have one- or two-year deals.

Governor Andrew Cuomo told the Albany Times Union’s editorial board that Bloomberg’s critique of those other agreements as “shams” and “frauds” was “factually incorrect.” He said Bloomberg ignored the fact that he’s proposing to link state aid to teacher evaluation systems “next year, and the year after, and the year after. The state contingency (for aid) is not going away. So any year that they don’t do the plan, they lose the 4 percent.”

“This is not a one-year exercise,” he repeated Tuesday, on Albany’s Talk 1300 radio program with Fred Dicker.

When asked about this after his budget briefing at City Hall, Bloomberg said, “Anything can be continued. I don’t know whether it’s going to be continued or not. But there’s certainly next year you would have to go through the same process.”

He did not criticize the governor, though.

“If we have a deal which I’d love to have and which we’d come very close on, it’s going to be a real deal that can stand the laugh test.”