The turmoil in the English language school sector has spread to one of the country’s most reputable institutions where teachers have issued strike notice over pay cuts.

EF International Language Centre at Fitzwilliam Square in Dublin, which is part of the EF Education First multinational, has told staff it was “in an extremely difficult operational position”.

In a letter to language teachers, the company said it needed to address its financial problems “to ensure the viability of the school moving forward”.

But teachers, who have been told new entrants will be paid €13.50 an hour, believe the company is exploiting the crisis in the sector to cut costs.

Gearoid O'Conarain, of the Independent Workers Union, which says it represents the majority of teachers at the school, said: "We don't want to be in a strike situation. We don't want to see students affected. But it does not make sense that the school is cutting wages, and we fear it represents a race to the bottom."

Teachers at the school, who are currently paid between €15 and €18 an hour, met management yesterday afternoon but were not satisfied with explanations for the cutbacks. As well as objecting to the reduced entry rate, they are seeking guarantees that existing hours won’t be cut, and also want improved regulation for the sector.

It is understood the company's problems stem from a fall off in students from Venezuela after that country's government earlier this year clamped down on cash transfers to Ireland. The Venezuelan currency is closely regulated by its Cadivi agency, which suspended applications to some schools in Ireland because it believed the money was not going towards its designed purpose.

The new Cadivi exchange controls were cited as a factor in the closure of Kavanagh College in Dublin, one of the five language schools to shut their doors in the past month.

EF is billed as the world's largest private education company, with global headquarters in Switzerland. It has partnerships with organisations ranging from Cambridge University to the Olympics.

The Dublin centre, which has about 15 regular teachers and 200 students - rising to 500 during the summer, declined to comment to The Irish Times.

The teachers are holding a lunchtime protest outside the school today to highlight their grievances.

Separately, foreign language students affected by recent closures are staging a demonstration outside the GPO on O’Connell Street at 3 pm, seeking progress on visa problems and for students who are out of pocket to be placed in other colleges.

An interdepartmental task force set up to deal with the crisis is to issue its initial report tomorrow.