Durand Academy Trust's governing body has taken the "painful" decision to close its boarding school, blaming government officials for the move.
The development is the latest blow to hit the controversial south London-based trust, which is mired in battles with both Ofsted and the Education and Skills Funding Agency (ESFA), and is set to have its funding withdrawn.
Tes revealed last week that staff at Durand's state-funded boarding school in West Sussex had been given a few days to come up with a plan to save their school, after being told that it faced a £500,000 funding shortfall. The trust also has a day school in South London.
In a letter sent to parents on Friday, seen by Tes, Durand's governing body chair, Sir Greg Martin (pictured), writes: "I realise you have been very upset, understandably, by the rumours about the boarding school.
"The governing body has not been in a position to write to you about this as we have been wrestling with a number of very difficult financial decisions, one of which was the boarding school.
"We also needed to consult with the staff of the school and consider their ideas and responses before a final decision could be made...Sadly they, like us, could not find the required saving and as such we need to make the painful and very difficult decision to close the boarding school."
He continues: "The fault does not lie with governors for this painful decision. It lies with the Education [and Skills] Funding Agency."
Sir Greg's letter accuses the ESFA of having "repeatedly attacked" the school through the press, and failing to provide the support that was needed.
It adds: "It is clear to us the EFA did not want the boarding school to be a success and are willing to risk your children's future education by attempting to take over the [day] school.
"I am sure the governors in place next year will fight against this and hopefully will succeed."
The letter features the trust's Ofsted "outstanding" rating from a 2007-08 inspection, even though this was later downgraded to "good" in 2014.
An inspection report placing Durand in special measures was published accidentally by Ofsted in February, and the trust is waiting to hear the outcome of a judicial review aimed at quashing the findings.
Durand opened its boarding school in 2014, calling it "the UK’s first, free state boarding school". Secondary age pupils were taken by coach to the West Sussex site each Monday, returning on Friday.
However, the trust failed to gain planning permission for a site expansion and faced controversy after recruiting a head of boarding who was subject to a misconduct hearing related to his former role at a different school.
A Department for Education spokeperson said: “We have confirmed to Durand Academy Trust that we will be terminating its funding agreement – giving 12 months’ notice. This is not a decision we have taken lightly but follows multiple breaches by the trust of its funding agreement and a failure or refusal to comply with the requirements set out by the department to address concerns about financial management and governance.
“DAT has been given multiple opportunities to respond to our concerns but has failed to do so. We will now begin the process to transfer the school to a new sponsor to safeguard the future education of Durand’s pupils and to ensure public money and public assets intended for the education of children are managed effectively.”