A troubled site of a former school could fall victim to a controversial land grab that knocks a £3million pound hole in the town hall budget.

What used to be the home of Ashmount School, in Ashmount Road, Archway, has been the subject of a bitter wrangle since the school moved to a brand-new £17million site last autumn.

Islington Council wants to bulldoze the site to make way for housing, while many people in the area want to keep it as a school – but the decision could be taken out of local hands if education secretary Michael Gove uses contentious new powers to snatch the site.

Under the Education Act 2011, the government can seize control of public land allocated for educational use.

David Barry, chairman of governors at the school, claims the site will be handed over to Swiss private school company Bellevue Education on an 125-year lease in exchange for a peppercorn rent – a nominal sum which amounts to virtually nothing.

He said: “This is a public asset being transferred to a private company, which has shareholders and is run for profit.”

The council had planned to raise £3m by selling the land to housing developers.

Cllr Joe Calouri, Islington’s executive member for children and families, denies the plans are set in stone.

He said: “I think if a free school opens in the borough against our will, we will lose £3million and we can only come to the conclusion that Gove is pushing a personal agenda over local needs.”

Funding cut

The council is already facing a 20 per cent cut in funding for education. This new budgetary hole could mean repairs to existing schools becoming unaffordable.

“It feels like we are being taken to the cleaners,” added Cllr Calouri. “Our position is that we do not want a free school.”

Frances Wilkinson, chairman of the Ashmount Site Action Group, said: “Although the secretary of state isn’t required to pay for the land, based on precedent, he often does.”

Not finalised

The council has set out to the Department for Education the losses that would be sustained, but the DfE has yet to offer compensation.

A DfE spokesman insisted that the agreement had not been finalised and talks were still ongoing.

“We have identified the former site of Ashmount Primary as a possible site for an approved free school and we are in contact with Islington Council about its use.

“However, no decisions have been taken and discussions with the proposers, council and local community are still in the very early stages.

“As well as providing high-quality school places, the free school will drive up standards and provide greater opportunity and choice for local parents and children.”