The city and its teachers union were set to miss the deadline on a deal on teacher evaluations Thursday, meaning the city could lose out on up to $450 million in state money and grants, Mayor Michael Bloomberg and the union said.

Talks among schools' Chancellor Dennis Walcott and United Federation of Teachers President Michael Mulgrew broke down at about 3 a.m., but officials from both sides delayed any announcement until the afternoon.

In dueling news conferences, each side rushed to blame the other.

"There was an agreement to be had here. We were actually very close," Bloomberg said. "But unfortunately, every time we approached a deal in recent days, the UFT moved the finish line back."

UFT President Michael Mulgrew countered that the Bloomberg administration failed to follow through on a deal.

"The intransigence of the Bloomberg administration on key issues has made it impossible to reach agreement on a new teacher evaluation system," Mulgrew said. "Mayor Bloomberg blew the deal up in the early hours today, and despite the involvement of state officials we could not put it back together."

The state has made teacher evaluation systems a condition of receiving millions of dollars in aid, and Gov. Andrew Cuomo said he would not extend the deadline.

The fight over the evaluation system comes as the city is locked in a battle with the union representing school bus drivers who on Wednesday went on strike for the first time in 34 years.

For the second day in a row, thousands of New York City schoolchildren, including many with special needs, had to find alternative ways to get to school.

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Maduro, wife arrive for court ... Kids celebrate Three Kings Day ... Out East: Custer Institute and Observatory ... Get the latest news and more great videos at NewsdayTV

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