Varndean school in Brighton is among the best in the country, but you would not know it from the state of its buildings.

Its corridors are filthy, caked in dirt trampled in from school grounds left muddy after builders have long gone. The boys’ toilets can only be described as squalid.

Turn a corner towards the school’s drama hall and you are in a corridor with ugly metal ducting and pipes running along its length. It has shabby walls, yet this pound;2.5 million extension only opened two years ago.

There is a constant, irritating, high-pitched whine throughout the school from a faulty fire alarm. The alarm has gone off four times today - protective covers around its buttons do not shut properly and pupils set them off. Some outside doors do not close properly, and neither does one pair of fire doors.

Headteacher Andy Schofield stops outside the school canteen. He peers in at a dirty floor and shakes his head. “It’s never cleaned,” he says.

The doors are kept locked by the private contractors who run it and nobody else can get in.

Most heads would balk at showing a visitor all this. But Mr Schofield is not ashamed - he is just very angry. His school is part of what was supposed to be a flagship private finance initiative with the now struggling engineering firm Jarvis, which has recently sold its share in the project.

He says that from the beginning it has been a nightmare. “This could have been a show school for Jarvis,” he says, looking out of his office window across a panoramic view of Brighton. “It’s been a real lost opportunity.”

Mr Schofield was never averse to private-sector involvement in schools.

Varndean has its own e-learning business with a half-million-pound turnover.

“We have no problem with making money or being businesslike,” he says.

“What I do have a problem with is shelling out a lot of money for things that aren’t actually happening.”

The school pays pound;28,000 a month for a range of services, including cleaning and maintenance.

Much of the head’s anger is reserved for the education authority, Brighton and Hove council, which he claims has not stood up to Jarvis.

The paradox is that while Varndean school recently appeared in the Office for Standards in Education’s honours list - the 234 consistent high-achievers among England’s schools - the legacy of its PFI deal is the one thing holding it back.

Three years ago Jarvis won a 25-year pound;105m contract to upgrade and maintain Varndean as well as three other Brighton schools - Dorothy Stringer, East Brighton college of media and art (Comart) and Patcham high school.

For Varndean the deal meant some much-needed extensions to its 1920s buildings, including a new sports hall, drama studios and an Astroturf soccer pitch. Mr Schofield welcomed it with open arms. “I rather naively believed that it was sold to us so I could get on with running the school.”

In reality, a nine-month construction programme ended up taking 30 months, and new buildings were signed off that did not comply with Department for Education and Skills design guides or required standards of accommodation.

When the school’s new technology and drama wing opened, rooms had no equipment, though Mr Schofield insists this was promised in the original deal. The school has since spent pound;75,000 re-equipping and refurbishing parts of the building.

For two years Varndean has paid pound;28,000 a month for facilities management but has seen no maintenance plan, no refurbishment plan, and no plan for day-to-day management.

A profit-share agreement with Jarvis on letting out school buildings had promised to bring in extra cash, but the school has received nothing because lettings have brought no profit since Jarvis took over.

“It also means we’re obsessed with counting the number of hours we use our own buildings, which doesn’t fit into the Government’s extended schools policy,” says Mr Schofield.

“You have to pay per hour for using the school out of hours.”

And when the school gets a bill from its private partner, 33 per cent is added on as “management cost”.

The school’s governors and head have complained to an exhaustive list of people, including David Panter, Brighton and Hove council’s former chief executive, David Hawker, director of children, families and schools, local MP David Lepper and former schools minister David Miliband, but the issues remain unresolved.

Mr Schofield says the financing of the school’s PFI contract amounts to misuse of public money, and governors have agreed to complain to the Audit Commission. “It’s the private sector making money at the expense of the public sector,” he says. “I don’t think anybody would mind if there was a dual degree of sharing in the benefits, but it certainly looks as though it might be one way.”

Jarvis was at one time the biggest company involved in private finance initiatives, with 19 deals covering more than 120 schools. But last year the company had a pound;230m debt and struggled to avoid bankruptcy.

It has now pulled out of the education sector to concentrate on roads, trains and plant, and recently sold its share in the Brighton and Hove PFI project to the Secondary Market Infrastructure Fund.

Jarvis is still responsible for cleaning and maintenance but the work is being monitored as it withdraws from these contracts, says SMIF.

Jarvis, which says it does not run the Varndean contract any more, refused to comment on the state of the school.

Brighton and Hove council insists it has “unremittingly” pressed Jarvis to perform to contract and is in regular contact with schools over any problems.

“It is no secret that the performance of Jarvis in its day-to-day management of school facilities originally left much to be desired,” said a spokesman.

“Its performance has improved with new equipment, strengthened local management and better staffing levels, thanks mainly to pressure from the local education authority. But there is room for further improvement.”

There are currently 514 schools in England involved in PFIs, according to the DfES. But published evidence has yet to make the case that PFI deals have been a success for schools.

The Institute for Public Policy Research found that there was no evidence that PFI offers any cost advantages in building and maintaining schools.

Tim Gosling, IPPR research fellow on PFIs, argues that although there can be advantages for some sectors in transferring construction and long-term maintenance of buildings to a private contractor, for schools there are limited advantages.

“Outsourcing across the board is neither a cheap nor an easy option,” he says. “You may achieve better value through outsourcing if you go about it in the right way.

“However, if you’re going to manage a contract in a particular manner, then that is going to take you time.”

There are also tensions with the Government’s extended schools policy - how can schools open for longer hours if their PFI contract has them counting the cost of out-of-hours use of their buildings?

Mr Gosling adds: “Jarvis got estimates of future costs and revenues badly wrong and, as a result, individual projects have suffered.

“If something looks too cheap to be true, it probably is.”