After financial cuts forced the disbanding of the service, 18 redundant teachers - with the backing of the Musicians' Union - formed the Newcastle Musicians Co-operative to offer tuition. They expanded the range of instruments that could be learned from traditional woodwind and brass instruments to acoustic and rock guitar, drums and even the penny whistle.
The response has been enthusiastic: at Heaton Manor comprehensive 30 pupils are being taught the guitar and flautists are learning percussion.
Necessity fostered enterprise. "Because we're no longer on a fixed budget, we have to meet the demands of the customer much more," said the co-operative's general manger, Michael Weipert. "A school can ring up and ask if we can help out with percussion. Two-and-a-half years ago, we would not have been able to supply that - now we can pull in people to teach any subject we want."
David Dunston, deputy head of music at Heaton Manor, feared the worst when the local authority service was scrapped. "We put on at least two musicals a year. That would have had to come to an end if we couldn't have got the support of instrumentalists," he said.
Heaton Manor, a mixed comprehensive with 1,600 pupils, has an illustrious musical tradition and two years ago won a competition run by The Daily Telegraph for young jazz musicians. Its bands frequently enter national events. "We've kept going and the numbers learning an instrument have increased because the peripatetic teachers have organised themselves so well," said Mr Dunston.
The co-operative's success has come as a relief to Steve Halsey, Newcastle's music adviser. "One of our main concerns was that we would lose instrumentalists in the bands and ensembles," he said. "Music teachers within schools don't have the time to teach instruments. We rely on a peripatetic service."
A Pounds 48,000 grant from the council in the first year helped to get the co-operative established, with a further Pounds 9,000 for centralised musical activities to fund the city's bands. Now the enterprise is self-supporting.
Close links are maintained with the local authority. Schools are charged Pounds 21 an hour for up to eight pupils, and parents, when billed direct, pay Pounds 3.50 per lesson.
The co-operative is being watched by other councils, among them Swindon, which in April became a unitary authority. Last week councillors voted to disband the music service after headteachers had indicated that unless the price of lessons was reduced, they would either employ cheaper private teachers or cancel tuition.
"Teaching staff have started looking at the Newcastle model as a possible way forward," said Swindon's head of music, David Barnard. "In the past two months, two secondary schools left our system and decided to use private tutors. It's all based on finance - we were going out at Pounds 23.25 for LEA schools and Pounds 26.25 for GM schools."
Five or six years ago, there was a pool of 800 young musicians on which Swindon could call to form bands and ensembles. The number is now down to 300. Mr Barnard, who moved to Swindon from Kingston four months ago, says that battling to save the service, which has six full-time staff, has been "very depressing".
Various options are being considered. "In some boroughs, the music service has formed itself into a charitable trust," he said.
"Newcastle started from a very firm foundation, but we have been haemorrhaging. There are many private teachers, charging between Pounds 12 and Pounds 18 an hour. We must make ourselves as competitive as possible."