East Brighton College of Media Arts (Comart) shut today, three years after it was included in a pound;105 million PFI deal to regenerate four schools in Brighton.
Now it is feared the city may be saddled with a bill for as much as pound;17m if it is proved the local council deviated from the agreed 25-year contract.
The council, which signed the deal with construction company Jarvis, leading to a pound;2.5m redevelopment of Comart in the summer of 2002, declined to comment on any likely financial penalty owing to the school's early closure. A spokesman for Jarvis said: "We have (worked) and will continue to work closely with the council on this matter."
Falling rolls, poor results and truancy plagued Comart - which serves some of Brighton's most deprived estates - for years. It closed and reopened under the Government's fresh start programme in 1999. The school - where just 13 per cent of pupils gained five GCSE grades last year then went in and out of special measures - was included in the PFI contract.
But consistently low GCSE results, falling rolls and truancy forced Brighton and Hove council to announce it would close the school. This term, just 31 students remained in Years 7, 8 and 9. Students left the school on Thursday and staff were today meeting for the final time.
Assistant head Simon Harding said staff and pupils were undergoing "a natural bereavement process" and facing the "culture shock" of starting new schools. He said he would not be surprised if GCSE results at the school would "double or triple" this year.
"Obviously, until we know, this is speculation, but we have had help from other schools and with no pressure from Ofsted, the students worked exceptionally well," he said. "The way I look at it, having a certain degree of autonomy from the LEA, we could create an appropriate curriculum for the school serving a disaffected area. Those results will be the school's final epitaph."