Chicago is to close down up to 80 poor-performing schools and reopen them as small specialists.

Two-thirds of them will be run by independent organisations, half of those as charter schools.

The sweeping six-year $150 million (pound;82m) initiative has been billed by the city’s Mayor, Richard Daley, as an “educational rebirth” for struggling schools in America’s third-largest authority.

Mr Daley said the radical revamp will position Chicago as America’s “national laboratory of innovation for education”.

Announced last week, the changes will force hundreds of teachers to reapply for their jobs. The schools will be reconstituted into 100 new ones, nearly all with 500 pupils or less, specialising in particular subjects. Some primaries and secondaries will merge.

Schools will be run by businesses, education reform groups, teachers, churches and others as charter schools, or under specific contracts.

Officials said the revamp, dubbed Renaissance 2010, was a last-ditch shot in the arm for chronically low-scoring schools that had exhausted all other options.

“We must face the reality that - for schools that have consistently underperformed - it’s time to start over,” said Mayor Daley.

Fewer than 15 per cent of students in secondary schools slated for closure met test-based academic standards, he said. One in 10 of Chicago’s primary schools also faces overhaul.

Publicly funded but with greater autonomy to experiment, charter schools offer a much-needed alternative where traditional education has failed, say supporters. But critics complain that they are not subject to the same academic accountability as state schools and that commercial operators chasing public money have trampled on the high ideals of pedagogical innovation meant to underpin them.

“We’re not throwing out the old model, just bringing in new ones,” said Chicago public schools spokesman Peter Cunningham. “There’s more than one way to skin a cat and the bottom line is that all schools must meet the same test standards.”

The new schools will be on five-year performance contracts, Mr Daley said, but he admitted the overhaul would be painful.

Schools will be free to hire whoever they want. “It’s possible that some teachers won’t be rehired,” said Mr Cunningham.

The Chicago Teachers Union declined to comment, but in 2002 it waged a bitter dispute with city officials over the reconstitution of two troubled schools.

The scheme fleshes out piecemeal reforms in Chicago that have already carved up three high schools into 12 smaller ones, and will see the opening of a trade union-run charter school, specialising in vocational training.

Prospective school managers include a law firm and Baptist church, said Mr Cunningham.

Some new schools will be built from scratch, but most will occupy the old sites, forming multiplexes of schools under the same roof.

John Thomas, principal of Mose Vines academy, one of four small schools that recently replaced inner-city Chicago’s Orr high school, said smaller was better. “Teachers relate better to students because they know their name ... attendance is up 15 per cent and we’re more flexible.”