Aberdare girls' school has raided cash reserves to pay pound;76,000 legal costs for its abortive battle to prevent a Sikh pupil wearing a religious bangle - the Kara - in class, it emerged this week.
But the school in Rhondda Cynon Taff said it could be paying out more for costs incurred by the human rights organisation Liberty. Liberty fought the case under the Race Relations Act on behalf of 15-year-old Sarika Watkins-Singh.
Ian Blake, governors' chairman, said the Pounds 76,000 costs would not affect the standards of pupils' education. "Over the past two or three years we've been prudent," he told TES Cymru.
Ms Watkins-Singh had claimed that wearing the steel bangle was fundamental to her religious belief. The school denied racial discrimination, saying wearing the bracelet broke school rules.
Rhondda Cynon Taff council's in-house legal team stopped offering free advice in February after the school opted to take its case to the High Court.
Mr Blake has yet to hear what Liberty's bill will be, though it is likely the school will be liable for most of this. "We're still negotiating with the LEA in terms of whether our budget can stand it, and whether they can subsidise us," he said.
"We were advised beforehand that what we were doing was legal. We had feedback from a barrister the LEA had employed that we had a strong case. Then all of a sudden they pulled out.
"There were five interim hearings that supported the school's status quo. We had no reason to think we wouldn't be anything other than successful - no one advised us we were breaking the race relations act.
Sarika is having home tuition via the internet as she studies for seven GCSEs. Next year she plans to go to Pontypridd College. She is still having counselling after her legal battle.
A spokesman for Rhondda Cynon Taff said all matters relating to the court action are the responsibility of the governing body.
No one was available at Liberty to comment.