Surveying the assembled great and good at the opening of Willesden’s Capital City Academy a couple of months ago, Tony Blair was in expansive form. Here was something to be celebrated. A new state-of-the-art school designed by the architect Norman Foster: a beacon to light the way for others.

“Why shouldn’t a secondary school be built on the scale and grandeur of a university?” the Prime Minister asked. “Students should feel a real sense of pride and worth in their schools and it is right that they exemplify the best in British design. State-of-the-art ICT, whiteboards, sports facilities, community facilities, public space, facilities for out-of-hours activities. This is a school of the future.”

Other, less fortunate, local schools might have had a different point of view, had they been asked. They might have liked the chance to spend even just a tiny proportion of Capital City Academy’s pound;27.5 million building budget on improving their own facilities.

Mr Blair went on to point out the huge rise in capital funding for schools under Labour, from pound;700m in 1997 to nearly pound;4 billion this year, and to promise that far more schools would benefit from such funding in the future.

But the truth is that the huge cost of city academies must now be something of an embarrassment to Downing Street, which has championed this new breed of inner-city school since its inception nearly four years ago. Often built from scratch on green-field sites, their capital budgets have spiralled way above the initial estimates.

When he first announced the city academy programme in September 2000, David Blunkett, naming the Willesden academy as one of the first, said that although costs were still to be finalised, each new school would cost about pound;10m. About a fifth of that would come from sponsorship.

It would not be long before his figures would begin to look wildly optimistic. Guidance from his department’s Schools Building and Design Unit, compiled in 2002, indicated that the average cost of a newly-built secondary school was actually around pound;14.6m - almost one and a half times Mr Blunkett’s estimate.

But even by then, the price of the new city academies had risen much higher than that guideline. Figures for the first five, given in a Parliamentary answer in June 2002, showed they were then expected to cost twice what Mr Blunkett had hoped. At that time their average capital budget was pound;20.5m.

Since then, things have got worse. The latest capital budgets of the academies, released to The TES by the Department for Education and Skills, show the first five academies now have an average budget of pound;23.17m, almost pound;3m more than was expected two years ago.

Academies whose building work started later are expected to cost even more.

The average capital budget for the 17 academies which will open by this September is pound;25m - two and a half times the original estimate.

Capital City Academy, with its top-flight architect and its pound;27.5m budget - which has risen by more than pound;4m since 2002 - is by no means the most expensive. That honour goes to City of London Academy in Southwark, which currently has a capital budget of pound;33.7m.

The total for the first 17 is pound;425m. If the price of the 53 academies scheduled to open by 2007 sticks at the current level - and it may rise, of course - the programme will by then have cost pound;1.3bn, including sponsorship. That is equivalent to a third of this year’s total national capital budget for schools.

Hardly surprising, then, that Downing Street is casting around for alternatives to such expensive, new-build projects. A Number 10 source told The TES last month that officials were looking at ways schools could become academies without constructing new buildings. They were also thinking of dropping the requirement for pound;2m in sponsorship, the source said.

Again, this was hardly surprising. Many early sponsors dropped out and had to be replaced, and although private funding was expected to bring in a fifth of the total, that did not happen. The standard sponsorship remained at pound;2m, and although some paid more and some less, it now accounts for just one-thirteenth of the total.

But despite some unrest among the heads of less fortunate schools, the academies themselves are unrepentant. Their schools are in some of the most difficult areas, they point out, and their children are some of the most deprived.

Tom Widdows, principal of The Business Academy in Bexley, is typical.

Pupils at his school, formerly known as Thamesmead community college, had been missing out for years, he said.

“The facilities at Thamesmead were awful,” he said. “It hadn’t been decorated for years, the roof leaked in 14 different places. There was graffiti everywhere and the science labs were out of the ark. It wouldn’t have happened in a middle-class area.

“Now the pupils have got a school they can be proud of. Attendance has risen from 78 per cent in the old school to more than 90 per cent in the first year of the new one. We’ve had record results across the board.

“When people say to me, ‘Shouldn’t every school be the same as this?’ my answer is ‘Yes’. But these children have put up with it for so long, if they’re going to start somewhere why shouldn’t they start here? To me, it’s natural justice.”

The worry in some quarters is that the academies will not serve the working-class children who are Mr Widdows’ concern but will cream off middle-class pupils from local schools. There have been complaints that rules allowing academies to select pupils by aptitude, or to take pupils from a wide geographical area, could put their neighbours at a disadvantage.

It is certainly true that the academies have proved popular with parents, and that large numbers of parents want to send their children to them. The TES asked all the first 17 academies how many applications they had for this September and their figures showed they had, on average, more than two applications for every place. The most popular was the City of London Academy, where there were more than four applications per place.

But an examination of their admissions policies suggests that these fears are unfounded. Only a small proportion of the academies have decided to take up the option of selecting some pupils by aptitude. The Bristol and Capital academies select some pupils for sport, City of London for business and Peckham for the performing arts. The rest are non-selective, though Mossbourne community academy in Hackney has split its catchment, taking 60 per cent from within a kilometre of the school and the rest from across the whole of London. Walsall and City also have large catchments.

In some cases there may be a reason for the academies’ reluctance to introduce selection. Recent judgments by the schools adjudicator found selection tests could be unfair - in effect, testing pupils’ ability and knowledge rather than innate aptitude. This has made some schools nervous.

Nigel Akers, vice-principal of Nottingham’s Djanogly Academy - formerly Djanogly CTC - told The TES it would like to select pupils for technological aptitude. But because of concern about possible legal action from disappointed parents, it was waiting until a fair test had been developed, he said.

The Specialist Schools Trust has recognised the problem and has sent out guidance to all the schools under its umbrella warning them to take care when selecting pupils by aptitude.

But its chief executive, Sir Cyril Taylor, is bullish on the issue. So long as schools follow the rules, he says, they should be safe from legal action.

“Obviously, it’s been a sensitive point,” he says. “But if schools follow the guidance I think they should be all right. A lot of the opponents of specialist schools will say they cream off the best pupils on their ability. They don’t like it when we show that isn’t the case.”

Whatever the virtues of the city academies, they have a long way to go to fulfil the ideal spelled out by David Blunkett back in September 2000.

His vision was about bringing communities together - but spiralling costs and controversy over selection look likely to bring further division.

“City academies will be at the heart of their communities and will help revitalise the areas where they are located,” Mr Blunkett said. “We will put the heart back into core cities, making them excellent places to work, learn and live in the 21st century - city academies are a vital component in delivering that.”