Great Dalby school, in Leicestershire, was planning to replace mobile classrooms with a new, cutting-edge design teaching block for infants.
But the school is now at the centre of a debate about whether the work should go ahead at all, after the newts were found on the proposed site of the new building.
The Department for the Environment, Food and Rural Affairs has issued a protection order to save the newts, and English Nature confirmed that a special licence was needed to destroy the habitat of any protected animal.
The county council was unable to offer the school much help. It sent out the following, less than illuminating, statement: "An ecological and protected species survey was undertaken, and great crested newts were found inhabiting a pond at the edge of the site. Nobody knows exactly how many newts there are.
"The construction of the classrooms would severely disturb the habitat, and the measures that needed to be taken could not be quantified.
"The practicalities of construction in relation to this habitat - and the potential cost of mitigation and compensation measures, when added to the general construction costs - would not represent value for money."
It concluded that the solution may be "to retain the existing mobile, provided it is reclad in a more acceptable manner".
Meanwhile, headteacher Chris Hannon said the school was in a state of limbo, and awaiting a decision. "It is frustrating. The money is there to have a purpose-built modern building for the infants," he said.
The great crested is Europe's largest newt. And anyone thinking about removing it from its habitat might do well to reconsider.
The amphibian has a distinctively warty skin and gives off a foul taste to any would-be predator.