CHICAGO (Reuters) - School was out in Chicago on Monday and parents scrambled for child care after public school teachers staged the first strike in a quarter century over reforms sought by Mayor Rahm Emanuel and endorsed by President Barack Obama's administration.

Some 29,000 teachers and support staff in the nation's third largest school district were involved, leaving parents of 350,000 students between kindergarten and high school age to find alternative supervision.

Churches, community centers, some schools and other public facilities prepared early on Monday for thousands of children under a $25 million strike "contingency plan" financed by the school district. The children will be supervised half a day and receive breakfast and lunch, allowing some parents to work.

The union has called the plan to care for children during the strike a "train wreck." It warned that caregivers for the children do not have proper training, and there are fears of an increase in gang-related violence in some high-crime areas.

Emanuel, the tough talking former White House chief of staff for Obama, blamed the union for the strike and said the two sides had been close to agreement.

"The kids of Chicago belong in the classroom," Emanuel said at a late Sunday night press conference after talks broke down.

Chicago offered teachers raises of 3 percent this year and another 2 percent annually for the following three years, amounting to an average raise of 16 percent over the duration of the proposed contract, School Board President David Vitale said.

"This is not a small contribution we're making at a time when our financial situation is very challenging," he said.

The school district, like many cities and states across the country, is facing a financial crisis with a projected budget deficit of $3 billion over the next three years and a crushing burden of pensions promised to retiring teachers.

Emanuel said two main issues remain to be resolved - his proposal that teachers be evaluated based in part on student performance on standardized tests, and more authority for school principals.

But union president Karen Lewis, who has sharply criticized Emanuel, said the standardized tests do not take into account of the poverty in inner city Chicago as well as hunger and violence in the streets.

More than 80 percent of Chicago students qualify for free lunches because they come from low-income households, and Chicago students have performed poorly compared with national averages on most reading, math and science tests.

Union officials said more than a quarter of Chicago public school teachers could lose their jobs if they are evaluated based on the tests.

"Evaluate us on what we do, not the lives of our children we do not control," Lewis said in announcing the strike.

Emanuel is among a number of big city mayors who have championed such school reforms and Obama's Education Secretary Arne Duncan has endorsed them.

The outcome of the strike could have national implications for school reform.

The Chicago confrontation also threatens to sour relations between Obama's Democratic party and labor unions with just weeks to go before the presidential election on November 6.

While Obama is expected to win the vote in Chicago and his home state of Illinois, union anger could spill over into neighboring Midwest states such as Wisconsin, Michigan and Ohio, where the election with Republican Mitt Romney is much closer.