The school had been due to lose one of its teachers because of a drop in the school roll.
By applying the council's formula, which advises on appropriate levels of staffing, the cutback was planned on the basis of the number of pupils who wou
ld be at the school next term.
The Pittenweem protest last month
But the parents said the formula was too rigid and with roll numbers at rural schools often fluctuating provided little stability.
The council has now said it is to review its policy following the parent pressure from the East Neuk.
The chair of the education committee, Douglas Chapman, confirmed at a meeting with parents from Pittenweem Primary that new policy should be in place for the 2009/10 session.
He said the local authority would consult with parent councils as part of this process.
And Pittenweem parent council chair Douglas Noble said: "The councillors agreed with our view that the needs of rural schools like Pittenweem are not reflected in the current formula."
"The council was very receptive to our concerns about the issues facing rural schools, such as the instability created by the rigid application of the 'formula', the problem of large composite classes and the role of the teaching head.
"The new paper should be before the committee in the autumn, and it should not take any longer than six months for a new policy to be in place.
"This is enough time to save a teaching position at Pittenweem and prevent our headteacher from becoming a teaching head."
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