The Cheshire-based business, whose chairman, ex-teacher Kevin McNeany, is education’s first millionaire, will run the council’s school improvement and ethnic minority services.

Hackney would not comment this week on the move which signalled the Government’s readiness to let private companies profit from the state education sector. It is the first time ministers have been able to impose outside contractors on a council.

David Blunkett, as Education Secretary, will now direct Hackney to sign the contract.

The value of the contract is not known, but Estelle Morris, the minister reponsible for school standards, said that Nord Anglia combined a bid of sufficient quality with strong partnership.

She added: “I am confident that this marks the beginning of a new era in the borough where parents, teachers and pupils can feel they will, at last, get the education service they deserve.”

Nord Anglia, with net assets of pound;15.3 million, will run Hackney’s school improvement service from July 1 and its ethnic minority achievement service from April 2000.

The company’s business interests include private schools in the UKand overseas, courses for teachers of English as a foreign language and inspections for the Office for Standards in Education.

Its revenue last year went up more than 19 per cent to pound;48.1m while its pre-tax profits increased by 4.5 per cent to pound;2.5m.

Just five out of the Government-approved list of 10 private, public, profit and not-for-profit organisations were formally invited to bid for the work in Hackney.

But private invitations were also issued to the London boroughs of Newham - hailed as a model authority by inspectors - and the City of London Corporation, which has no secondary schools.

Neither council had been subjected to the rigorous two-stage selection process that companies went through to gain ministerial backing to get on its approved list of contractors. Neither, however, bid for the work.