Education Minister Ruairi Quinn has agreed to sit down with principals to discuss how small primary schools can amalgamate without closing any of them.
Many small schools fear that cuts in teacher allocations coming down the line in September will be the first step on the road to closure.
Mr Quinn faced a silent protest from principals who held up 'Save our School' placards when he addressed the annual conference of the Irish Primary Principals Network (IPPN) yesterday.
The minister is holding firm on the teacher cuts announced in the Budget for small schools but told principals at the conference: "I don't want to close any school."
He said he wanted to engage in a debate about the changing face of rural Ireland and gave a commitment to discuss a federation-style arrangement for small schools.
IPPN director director Sean Cottrell said there was a lack of understanding of the importance of small schools and the role they played in rural Ireland.
He said if small schools closed, hundreds of rural communities would disappear and Church of Ireland communities, in both rural and urban settings, would be severely damaged.
But he said there was an argument to be made about revising the governance structures of small schools and introducing certain economies of scale.
He said they were in favour of a federation arrangement, which would centralise management and administration while retaining teaching and learning in existing schools.
He said it would involve a cluster of two or three very small schools coming together to share staff and board of management, phased in over an agreed timeframe.
But crucially for communities, for whom the primary school was their lifeblood, the physical buildings would not be touched and schools would not close.
There would be one board of management, one budget, one staff, a full-time shared administrator, a full-time shared caretaker and one administrative principal.
Mr Cottrell said there would be one school roll number and one point of contact for the department and other agencies.
"The beauty of the cluster option is that the aspects of the school that matter most to parents are retained and those that matter least are centralised," he said.