Ian Hume, who led Nord Anglia's take-over of Hackney's school education services, left the project suddenly on Friday.
The multi-million pound company refused to explain Mr Hume's departure after less than a month in charge of the privatised school improvement and ethnic minorities services and, while insisting that he had been replaced, declined to identify the new manager.
The Government ordered Hackney, east London, to hand over failing education services to Nord Anglia in July after a damning report from the Office for Standards in Education. The company was the only one to bid for the contract.
The latest crisis will come as a blow to ministers who have identified themselves with the flagship scheme. It follows revelations in The TES of financial wrangling between the authority and Nord Anglia that delayed the signing of their contract until mid-July.
Announcing Nord Anglia's takeover in June, education minister Estelle Morris said: "I am confident that this marks the beginning of a new era in the borough where parents, teachers and pupils can feel they will get the education service they deserve."
But Kevin Daws, the council's Liberal Democrat group leader, said Mr Hume's departure "set alarm bells ringing" about a project that was undermining morale in Hackney's school service.
"When someone leaves like this and there is no explanation given to even leading members of the council it sends out the wrong signals," he said.
He said the sudden disappearance of Mr Hume, a former HM inspector and chief executive of the Welsh Joint Education Committee, and his replacement by an unnamed project manager was just another example of the fog surrounding Nord Anglia's activities in Hackney.
Kevin McNeany, chief executive of Nord Anglia, confirmed that there had been a personnel change in Hackney, but refused to explain why Mr Hume had left or who his replacement was.
"I don't think we are going to allow the press to have that kind of detail about our staff any more," he said. "There is now a project manager in place but it would be unfair to that person to start parading their name in public. Safe to say that anything that is done is done in consultation with Hackney and the DFEE."
A spokesman for the Local Government Association, which has criticised the privatisation of council services, said: "The problems Nord Anglia are facing highlight the extraordinary difficulties private companies have in running education authorities.
Mr Hume himself could not be contacted through Nord Anglia.