Eastlea Community School in Newham, east London, has fallen below the minimum target for GCSE results this summer.

Last year, 33 per cent of its pupils achieved five or more GCSEs at grades A*-C including English and maths. This summer, the figure fell to 25 per cent.

Ministers have said all schools under the 30 per cent benchmark in their 2007 results must improve within three years or face closing under its controversial National Challenge scheme.

However, it is far from clear whether this applies to schools, such as Eastlea, that were above 30 per cent in 2007 but which have slipped below it in 2008.

Last September’s Ofsted report on the former failing school said: “Eastlea is an outstanding school, recognised nationally for many of its achievements. The staff are highly effective in helping pupils meet the aim of `being successful and feeling successful’.”

Eastlea was judged outstanding in 23 out of 26 aspects of its inspection, including in all seven of the judgments seen by Ofsted as most important.

However, a school source said that it had been dealt a blow last Christmas, three months after the latest Ofsted, when the head, Ann Palmer, left to become principal of the City of London Academy in Islington, north London.

Ms Palmer took with her several senior members of staff, said the source. Her successor, Chinye Jibunoh, started on Monday.

This week, Eastlea’s future was unclear. Newham council issued a statement saying that the school had “not delivered sufficiently well in terms of GCSE performance”, and that the authority was discussing with Government agencies how to proceed. An announcement was expected by early next week on its future, although the authority appears to have ruled out turning the school into an academy.