Bracknell Forest Council in Berkshire has received no bids for its school meals contract next year.
The deal, for 31 primary and four secondary schools, went out to tender last October and the local authority received nine expressions of interest.
But although eight caterers were shortlisted and a tender return date of 20 March 2006 was set, no bids came in.
A council spokesman said: "We are extremely concerned and are discussing ways forward with the current supplier and potential bidders to ensure that children continue to receive reasonably priced, good quality school meals."
The council said it was looking at the possibility of extending its current deal with Initial Catering for a year.
But Initial said it refused to pitch for the business again because the specifications in the tender documents didn't meet its criteria.
Food service consultant Vic Laws said the absence of bidders could be due to increased financial pressure on caterers.
"Contractors and councils need to be in partnership to ensure that the specifications are deliverable. Food and labour costs have gone up as a result of the new nutritional standards and councils must realise that a decent school meals service must either be subsidised or paid for by the parents," he said.
By Tom Bill