The sex scandal occurred at the elite Geelong Grammar School's Timbertop campus in the Victorian alps. Some 220 teenage girls and boys spend two semesters in the rugged bush environment as part of their third year in secondary school.
Fees and living costs for the year amount to more than $25,000 (Pounds 12,000).
The students at the centre of the row were expelled and suspended for crossing dormitories at night and sexually misbehaving. But parents angrily protested at the way the school had reacted and its treatment of the students.
They said that sexual intercourse had not occurred between the students and that only "heavy petting" and cuddling had taken place. They said what the students had done was wrong yet they had been treated the same as a student who was expelled earlier this year for growing marijuana at the school.