Teachers' leaders reacted angrily to the news that Jarvis, which has no record of running schools, will be paid pound;1.9 million to help raise standards in 700 of the worst performing secondaries in England and Wales.
But Prime Minister Tony Blair used his monthly press conference to make clear his determination to use private-sector practice to push through public-sector reform. It would be a mistake of "fundamental historic importance" to change course now, he said.
Jarvis will operate a support network to help local authorities and disseminate good practice to under-performing schools. This will include selecting examples of good practice, running a website and organising conferences.
It is the first contract of this type won by the company, whose education activity has previously centred on private finance initiative building work.
David Miliband, school standards minister, ordered an urgent report into the company's activities in Kirklees, Yorkshire, last November after complaints from heads about delays in refurbishments.
Jarvis is believed to be interested in the contract to run education services in Southwark following the withdrawal of rival WS Atkins from the south London borough.
Two of the key personnel in Jarvis Education Services formerly worked for Atkins - including Steve Davies, ex-director of education services in Southwark.
Eamonn O'Kane, general secretary of the National Association of Schoolmasters Union of Women Teachers, said: "Given the dismal record of Jarvis with Railtrack, it is hardly surprising that its involvement will be met with trepidation by teachers."
A Department for Education and Skills spokeswoman said: "This contract was awarded following an open and fair tendering process for which the public sector was free to apply. No one from the public sector came forward."
* A pound;1.8m contract to cut paperwork for teachers has been awarded to consultancy firm Serco and Manchester Metropolitan University.
The scheme is aimed at school administrators and will be overseen by the National College for School Leadership.