They claim there has been a breakdown of trust between themselves and CEA@Islington, which has a seven-year contract worth £21m to provide school services in the north London borough.
One teacher from Winton primary in King's Cross told the Guardian: "Staff have completely lost trust in CEA. We believe they have let us and the children down."
Staff are refusing to return until they are convinced asbestos does not pose a threat. They are particularly concerned that infants continued to be taught in a classroom above a duct after asbestos was found. They are also worried about the discovery of the substance in a boiler room where a caretaker worked and school jumpers were stored.
The row is a blow to CEA@Islington, which in 2000 became the first firm to take over a failing local education authority, but which has since been racked by problems.
In 2001 it came under fire after a flagship primary was accused of fiddling Sats tests results, and last year it was fined £500,000 for failing to hit key targets.
The latest row will increase criticism of the government's increasing reliance on the private sector to provide public services.
In the present case CEA@Islington accepts it was at fault for not consulting staff unions when the asbestos was first found but it insists the school is safe.
At the end of January, suspicious material was found in a heating duct beneath the nursery of the 330-pupil school and confirmed as asbestos.
A plan to remove it without shutting the nursery was formulated. But the unions were not informed. Teachers, who had learned of the problem, then began refusing to allow children into the area.
Staff claim that workmen then carried out tests for asbestos but allegedly denied this was what they were doing.
The unions were given details of the scare late in February when it became clear the infant area would have to close.
Parents are also angry and staff are calling for an independent inquiry.
CEA@Islington, which is part of Cambridge Education Associates, said it should have consulted the unions much earlier but says once it realised the infants' area would have to be closed it had been "completely open about the situation and kept the school management and the unions fully informed".
