Council bosses have been warned they may lose a £70m cash injection if it fails in bids to build two new special schools.
Norfolk County Council has struck a deal with the Department for Education for tens of millions of pounds to invest in special educational needs.
It will see the eight-figure sum paid over the course of the next seven years - with a first instalment of £28m to come this year.
Although the money will be used for a range of services, the terms of the deal state that the funding could be pulled if the council is unsuccessful in a bid to build two new special schools.
The council has said that the bid for the schools is in the early stages, so it is unclear when an announcement will be made about whether they will go ahead.
It is also unclear if money already given will have to be paid back if the bid proves unsuccessful.
Norfolk was given the funding boost as part of a DfE programme to help authorities with the biggest overspends in special needs provision.
The council aims to create 15 new school and community support teams - including recruiting 100 new workers - and develop new specialist resource bases.
John Fisher, cabinet member of children's services, said: "It is a huge milestone to have this funding agreement in place.
"Together with the additional annual investment the council has pledged for SEND, it provides the financial foundations for us to deliver our ambitious local first inclusion programme."
Maxine Webb, Labour's spokeswoman for SEND in Norfolk, said: "Having 100 new staff members will be fantastic if it happens.
"However, it would take a massive culture shift to make the [first inclusion] programme work.
"There is also real concern that the independent sector will take a hit and then will not be able to provide for the children that need them."
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