SUMMERHILL, the progressive independent school that last week won its fight against closure, is facing a legal bill of up to pound;150,000.
David Blunkett, the Education Secretary, formally accepted the right of children to skip lessons and annulled complaints about the adequacy of tuition and assessesment of pupils' progress.
Under an agreement with Summerhill the Department for Education and Employment will make an unspecified contribution to the school, which was founded in 1921 on the philosophy of AS Neill who said children should be educated free from fear.
The independent schools' tribunal which heard the appeal cannot award costs.
Zoe Readhead, Neill's daughter and the present head, said the DFEE had offered pound;7,500 as a "gesture". Civil servants said the figure was still under negotiation.
Donations estimated at up to pound;70,000 have flooded into the boarding school in Leiston, Suffolk, including pound;25,000 from individuals in Japan.
Mrs Readhead said she would love the DFEE to meet the school's legal costs but added: "We won't be going into the red at the bank. On the other hand, this does raise serious issues about what you would do if you were not well known."
Under the new agreement the Office for Standards in Education will continue to inspect Summerhill to ensure that improvements are maintained.
Mr Blunkett said he would ot compel children to attend lessons or engage in formal self-supported study.
Mrs Readhead, meanwhile, pledged to continue to provide a stimulating environment including "suitable class-based lessons".
And a DFEE spokesman said: "We have said all along that we are not trying to close Summerhill."
If the appeal hearing had continued it would have heard a leading educational researcher testify that the school's policy of non-compulsory lessons had no long-term negative effect on learning.
The academic evidence supporting the school was set out in a 63-page document that has been passed to The TES.
The document was prepared by Ian Stronach, research professor of education at the Institute of Education at Manchester Metropolitan University and a member of the British Educational Research Council.
It says the inspection which claimed to find serious weaknesses was unfair and it questions the objectivity of OFSTED. It describes Summerhill as an "important exemplar, nationally and internationally", for its work on values education and a preparation for citizenship.
He studied the school's GCSE results and confirmed that attendance was irregular, continuity difficult and progress was uneven.
But he said: "If the nature of Summerhill intake is taken into account ... my judgment would be that results, even in terms of formal examinations, can just as easily be interpreted as remarkable."