THE first school to mount a legal challenge after being branded a failure this week won an historic victory as the Office for Standards in Education quashed the decision to place it in special measures.

London’s largest secondary school was taken out of special measures the same week as Chris Woodhead left after six highly controversial years as chief inspector of schools.

Crown Woods in Eltham, south-east London, agreed an out-of-court settlement with OFSTED on Wednesday - a day before the two had been due to meet in the High Court.

OFSTED agreed to retract the decision to put the school into special measures. It will also pay the costs of governors and Greenwich council who were granted leave to seek a judicial review.

The standards agency acknowledged procedural flaws which rendered the inspectors’ judgment unsafe but believed that its view that problems within the school jeopardised the quality of education offered was correct.

The move could now pave the way to similar legal challenges from schools unhappy at the treatment meted out by inspectors.

The school and council complained the report that placed the school in special measures was unreliable because the four-strong inspection team saw so little of its work.

And Clive Efford, the Labour MP for Eltham, said: “The school’s victory raises very real concerns about the way that such inspections are carried out.”

Nigel de Gruchy, general secretary of the National Association of Schoolmasters Union of Women Teachers, said: “It is a fitting frewell message to Chris Woodhead.

“The settlement does, at last, establish a precedent enabling the judgment of OFSTED inspectors to be challenged and set aside if need be.”

Crown Woods, which will next year be taken over by Michael Murphy, who will become the highest-paid head in the state sector on a salary of pound;92,000, will be re-inspected.

OFSTED will now consult with the school’s governing body and Greenwich council to arrange when the inspection is to be carried out.

This week, as staff, pupils and council staff celebrated, George Gyte, Greenwich’s education director, said: “Morale is good and parents feel they were vindicated. I know Mike Tomlinson (the new acting chief inspector) well and regard him very highly. We look forward to working in partnership with him and his colleagues.”

Last year, OFSTED reported on 4,520 schools. According to the standards agency, during the past eight years, just four or five reports have been declared null and void after complaints. All have been re-inspected but OFSTED would not divulge the outcomes.

Latest figures, covering 1999- 2000, show there were 300 complaints about inspections, of which 116 were formal, written ones. Of those 116 complaints, 32 were partially upheld and five were upheld.

Elaine Rassaby, the OFSTED adjudicator, reviewed 18 complaints lodged between July 1999 and June 2000. Most were from schools.

Although she cannot require a re-inspection, she can recommend that OFSTED apologises, offers explanations, reviews a complaint andor reviews its procedures. Her annual report is expected next week.