In a damning report by the Office for Standards in Education, Kelsey Park School in Bromley, Kent, became only the fifth opted-out secondary school to fall short of acceptable minimum standards.
A quarter of the 865 pupils live outside the borough, and neighbouring Lewisham Council is now demanding changes to the rules governing publicity for school inspections. It claims at least 56 families of prospective pupils were unaware of the failure, and has accused the Funding Agency for Schools, which oversees the finances of the GM sector, of covering up the findings.
"The Government says it wants greater accountability to parents, but it is not prepared to apply the same standards to grant-maintained schools as it applies to local authority schools," said Gavin Moore, chair of the education committee.
The FAS rejected Lewisham"s criticism and said the case provided little evidence of a need to change the guidelines.
OFSTED guidelines say schools must "ensure that the existence of the full report is widely known and that it is readily available to all those who have an interest" - a duty Lewisham claims Kelsey Park did not fulfil.