Education and Employment Secretary Gillian Shephard has upheld the result of the ballot at Hurworth School, County Durham where parents voted two to one against grant-maintained status.
The move comes after an investigation by civil servants into accusations of intimidation and misinformation from both sides during the ballot campaign late last year.
Mrs Shephard launched the inquiry in the light of media allegations of dirty tricks. It is not known whether she actually received any complaints from parents or governors.
Although Mrs Shephard said her investigation found evidence of misleading information, misunderstanding and reports of intimidating conduct, she upheld the ballot result. And the Department for Education and Employment said the evidence was "not sufficient to meet the stringent tests required to decide that a ballot result should be overturned."
The ballot at Hurworth turned into a high-profile battle with Labour claiming that the Conservatives were trying to force through a decision to opt out in an attempt to embarrass Mr Blair.
Mr Blair, whose son Euan attends the London Oratory, a GM school, was accused in the House of Commons by Tory MPs of co-ordinating a campaign of "intimidation and browbeating". Labour countered that Tony Blair had no evidence to stand up claims of intimidation ... and if it was going on, he dissociated himself from it.
Keith Mitchell, Durham's education director, said: "Both Durham education authority and the school itself have steadfastly maintained, since the result of the ballot was announced, that they regarded the matter as being concluded and saw no need for a re-run of the vote.
"I note that the Secretary of State has now come to the same conclusion, although it has taken a regrettably long time for that decision to be reached. Now that the matter finally is concluded, we can concentrate on the partnership between the school and the local education authority, to which both parties are fully committed."