Parents, teachers and children in Shropshire were celebrating yesterday after the suspension of plans to close small village schools across the county.

As thousands of people protested outside, a meeting of county councillors decided not to go ahead with proposals that could have seen 22 village schools close.

But the authority said it would still be launching a consultation into plans to amalgamate 16 other primary schools in the region.

The Government had earlier ordered local councils to keep rural schools open, leading to accusations of hypocrisy because last month it had backed closures.

Bob Jeffrey, the deputy chairman of the board of governors at Myddle CE Primary School, near Shrewsbury, said people at the school were pleased, but wary, about the council's decision.

He said: "I was there this morning at the demonstrations, which were very impressive.

"We were delighted, of course, but with some trepidation because clearly whatever budgetary problems they were trying to address still remain. So the question of what needs to be done next still needs to be answered.

"So far the arguments about what to do have been put forward by the council on purely financial grounds. What we are saying is that there are other grounds that needed to be considered, things like the issue of how children get to schools and the effect on the community."

The council made the announcement about the future of the schools at the Shirehall in Shrewsbury, yesterday morning.

It had been considering amalgamations and closures because of the pressure small schools place on the education budget as they are funded on a per-child basis.

Councillor Ann Hartley, cabinet member for children's services, said: "Our decision today will enable us to take action by consulting on the merging of some schools, while continuing to discuss and consider potential ways forward with schools and stakeholders."

A crowd estimated at 2,000 people demonstrated outside the building during the meeting, carrying banners with slogans reading "Pupils not pounds" and "Small school, big family".

Jonathan Brough, the headmaster of Beck-bury Primary School, near Bridgnorth, took more than 100 people to the protest, including almost all of the school's 53 pupils, as well as parents, siblings and friends.

He said: "I'd like to think what we did had an impression on them. There were lots of us there, making lots of noise, and we said 'just because we're small doesn't mean you can pick on us'.

"Whatever the solution is, parents need to be able to choose for their children."

Mother Sue Osborne took her nine-year-old son Spencer, who goes to Beckbury, to the protest. She said it was good to see 'people power' have an apparent impact on policy makers.

"We are thrilled, they have obviously listened to us, and all the schools combining together has made a difference, said Mrs Osborne.

"I think the fact that the children were there really added to things and it showed how much they love their schools and what a great education they are getting there."

She said she was still very sorry for the schools that still faced amalgamation, and there would continue to be campaigns for their future.

After the council meeting finished, a group of delegates travelled to London to discuss alternative funding possibilities for the county's schools.

They were due to meet Schools Minister Jim Knight last night to ask for extra funding for the schools. Mr Knight wrote to local authorities yesterday, describing rural schools as "central to the life of village communities".

He said the letter underlined a legal duty for councils to protect popular rural schools.