Funding for academy trust axed
An academy chain is facing closure after the Education Funding Agency (EFA) announced it was terminating the group's funding agreement.
The Durand Academy Trust (DAT) runs an infant and junior school in Stockwell, south London, and a boarding school for older pupils in Midhurst, West Sussex.
The EFA said it had serious concerns about the financial management and governance of the trust.
The Durand Academy said it would fight the decision.
Durand Academy, which has more than 1,000 pupils at its three sites, received £17m from the government to set up the school for weekly boarders in 2014.
In a letter to former executive head teacher Sir Greg Martin, who chairs the governors, EFA chief executive Peter Lauener said there had been "repeated and significant" breaches of the terms of the funding agreement.
The letter, dated 11 October, said the academy trust had failed to comply with six out of eight requirements set out by the EFA.
It says £2m of public money transferred to the Durand Education Trust has not yet been repaid to the Durand Academy Trust despite a request made by the government funding agency in February 2015.
The letter also questions why the academy has been charged for the use of a leisure centre, on one of its own sites, by its pupils.
Academies Minister Lord Nash said: "Following much consideration, we have advised Durand Academy Trust that we are planning to proceed with the termination of the trust's funding agreement.
"A provisional notice of termination was issued to the trust on 4 July because of serious concerns about financial management and governance.
"That notice set out a number of requirements.
"The trust has failed or refused to comply with six of the eight requirements we set out to address our concerns.
"This is not a decision we have taken lightly, but it has been done to safeguard the future education of Durand's pupils and to ensure public money and public assets intended for the education of children are managed effectively".
Analysis by BBC education editor Branwen Jeffreys
It was one of then Education Secretary Michael Gove's favourite schools; a reason, he said, to be optimistic.
The founder, Sir Greg Martin, was knighted for services to education in the Queen's Birthday Honours in 2013.
But the Durand Academy Trust has been dogged by controversy because of the complex financial structures created around it.
It was the appearance of Sir Greg before the Public Accounts Committee that propelled the school into the headlines.
He faced questions about additional payments and a dating service registered to the school address.
The MPs also challenged the transfer of the ownership of school land into the separate Durand Education Trust, which runs a leisure centre on it.
Two years on and those unconventional arrangements are at the heart of the decision to terminate the funding agreement.
The Education Funding Agency's decision will also revive the debate about whether the Department for Education really has a grip on the finances of academies.
However, the academy said the EFA had been waging a campaign against it for a number of years, and said the campaign had been "characterised by misrepresentation, half truths and inaccuracies". Read full statement from Durand Academy
It said it had complained to the education secretary about the EFA, but had been ignored.
It said a self-governing academy had the right to "make a profit and surpluses for the benefit of the children in its care and to use this profit and surpluses as it sees fit to improve the facilities on offer to its children and their local community".
And it said an independent financial audit had uncovered no financial wrongdoing.
Shadow schools minister Mike Kane said: "This is an extremely concerning case, which further exposes the Tories' failure to properly oversee academy schools and make sure taxpayers' money is being spent where it should be.
"The Tories need to get a grip of the academy system as it stands, rather than make the problem any bigger by adding more schools and academy trusts.
"It's clear what we need - good teachers in good schools, but every day that goes by shows the Tories can't deliver the change we need."
In April, the National Audit Office criticised the Department for Education for failing to properly account for the spending of academies in general.
It said there was a level of "mis-statement and uncertainty" that meant the truth and fairness of accounts could not be verified.