An academy which has run up debts of pound;1.5 million could be bailed out by the Government if it can halt its overspending.

Unity city academy in Middlesbrough has spent pound;500,000 a year above its budget since it opened three years ago and admitted to a “legacy of financial, management and educational failures”.

Mike Griffiths, its interim chief executive, said the school had agreed a recovery plan to bring spending back into line.

“After that, it could mean us paying it back or the Department for Education and Skills making a contribution, but we have been told quite clearly what the expectations on us are,” he said.

The revelations will put renewed pressure on the Government’s academies programme, one of its most controversial education policies.

Steve Sinnott, general secretary of the National Union of Teachers, said:

“It’s quite extraordinary to be contemplating bailing out a school which has already had a lot of money thrown at it.

“The Government should be considering every child, not propping up a failed policy.”

Ten teachers and several support staff are due to be made redundant to stop the overspend at the academy, which is sponsored by Amey, the construction and support services company.

The remaining teachers are being given new contracts with longer hours for the same pay in order to make extra-curricular activities available for students.

Unions were locked in talks with the academy on Wednesday this week in a bid to avert a strike after a ballot for industrial action was held last week.

As well as concerns over redundancies and changes to contracts, staff at the school want action on pupil behaviour.

Sue Percival, the National Association of Schoolmasters Union of Women Teachers’ executive member for Teesside, said: “Even after the redundancies, I can’t see that the academy is going to break even. It is spending about Pounds 250,000 a year on supply, and there is a lot of long-term sickness. At any given time there are 20 or 25 teachers off sick with stress and general ill-health.”

Despite the school’s high exclusion rates, pupil behaviour is poor and some staff have suffered assaults that have contributed to the numbers off sick.

Doubts have also been cast over plans to form a federation with the successful Macmillan city technology college nearby.

Robert Howarth, Macmillan college’s chief executive, said the plan had been put on hold until the threat of industrial action is over.

Joe McCarthy, chairman of the trust that runs the Unity academy, said it had addressed staff concerns by temporarily excluding 26 pupils in an effort to restore discipline.

He said: “Ever since the scale of the financial issues facing the academy came to light earlier this year, we have sought to involve the staff and trade unions in a constructive dialogue over what, at the time, I warned would be difficult and painful decisions.”

The proper procedure was being followed with redundancies and nothing had been imposed regarding changes to working hours, he said.

The DfES declined to comment on whether it would write off the academy’s debts. A spokesman said: “The department has agreed a financial recovery plan with Unity city academy.”

* joseph.lee@tes.co.uk