WHEN CLAIRE Lillis first arrived at Ian Mikardo high school for pupils with severe emotional and behavioural difficulties (EBD), there was a panic button under her desk.

Today, the police hotline has long gone, and the school’s therapeutic dog, Missy Buttercup, curls up to sleep there instead. Rather than becoming violent, pupils who feel angry are encouraged to walk off their problems with the rescue sheepdog on the local estate.

This small change exemplifies how Ms Lillis, who won the prize for urban leadership at the London Teaching Awards this week, has transformed her school.

In five years, the energetic 40-year-old head and her staff have turned Ian Mikardo from an aggressive, monotone school in special measures, to the first of its kind to be judged as “outstanding” by Ofsted.

For a visitor watching the head laugh and joke with her pupils and staff in multi-coloured corridors, it is hard to believe some of the school’s past horror stories.

When Ms Lillis arrived at the school in Bromley-by-Bow, east London - leaving behind her previous job as head of education at Medway secure training centre in Rochester - she was the fourth head in nine months.

There were just 12 children on the roll, attendance rates were at just 67 per cent, use of restraint was common and the police were often called in to deal with violent incidents. Doors were locked so pupils could not run out of lessons and the fire alarms were set off constantly as they tried to escape.

The pupils came from some of the most difficult backgrounds imaginable, their home lives blighted by poverty, alcohol and drug abuse. And, at school, they did not get the care they needed, which meant many reoffended.

Ms Lillis recalls the bad old days. “It was totally out of control,” she says. “The whole place was painted what you would call ‘toilet blue’. There was a bad atmosphere and the pupils didn’t want to be here.”

Christiana Davies, a teaching assistant who has worked at the school for nine years and is now training to be a teacher, added: “It was so chaotic, you just never knew what you would be up against each day.”

Now there are 37 pupils and attendance is at 91 per cent. Last year was the first that no pupil due to graduate was either offending or in custody.

Most have gone on to pursue college courses.

Ms Lillis says much has been achieved by transforming the atmosphere of the school, which caters for 35 boys and two girls aged 11 to 17 in Tower Hamlets.

The first thing she did was to challenge pupils and staff to redecorate the toilets, aiming to cut out the bullying and violence that can lurk there.

She then embarked on an unusual project for a largely boys’ secondary school - setting up a hairdressing and beauty salon working to professional standards. The pupils can learn skills and have haircuts and facials. Staff and relatives also drop in.

The boys, including one who once held two social workers hostage, have taken to working in the salon with enthusiasm. The TES met a 12-year-old who had been excluded from numerous schools for violent behaviour. He was lying back in a chair relaxing in a facemask.

“It calms me down,” he says, as hip-hop produced by the pupils emanates from the stereo.

He is so serene, draped in fluffy white towels, it is hard to imagine how he ended up here.

Ms Lillis says: “I challenged the stereotypical macho image that means this kind of school usually has a workshop for motor mechanics. We all care about the way we look and there’s a boom in men’s grooming. Some of the best hairdressers are men.

“It’s great for learning about relaxation, cleanliness, health and safety and raising self-esteem. It opens the school up to the local community.”

The school also runs other businesses, like Kardo Krafts, selling ceramics and woodwork at Spitalfields market, and the Havakardo gardening company. A smoothie bar, where pupils can earn pound;10 a month, is also flourishing.

Practical subjects are coupled with frequent school trips. Twelve pupils and staff have just returned from a nine-day tour of Egypt.

But Ian Mikardo’s success is down to more than its colourful activities. Ms Lillis, who previously taught history at a mainstream school in Basildon, Essex has completely altered the curriculum and timetable.

“You cannot expect an EBD child to do maths at 9am,” she says. “Now we open at 8.30am, but lessons don’t start until 10am. This gives time for anyone who wants it to come in and have breakfast, talk through any problems they’ve had the night before and sometimes just calm down.”

The school has also taken on psychotherapists, so pupils can talk through their worries. If a child commits a crime, it is reported to police, but the pupil is not excluded. Ms Lillis says: “I went into this job because I wanted to prevent children such as these ending up in prison. If they were excluded we wouldn’t know where they were or if they are offending.”

All traditional subjects are woven into more general topic areas, called My World, My Future, My Body and My Passports. The themes encourage pupils to understand their place in the world and how they can become what they want in life, without turning them off school.

The staff have been vital to the school’s turnaround. One of Ms Lillis’s most controversial moves was to appoint a social worker as her deputy.

Tower Hamlets was initially apprehensive.

“Five years ago it was unheard of and it was considered maverick,” she says. “But the local authority is very supportive now. With Every Child Matters and other initiatives, this is the way education is going, with more interaction between different services. We were ahead of our time.”