She has rejected a request from Bennett Memorial Diocesan School in Tunbridge Wells, that its application for grant-maintained status be torn up following a dispute with ministers over its admissions policy.
Seven governors at the 1,100-pupil school have already taken legal advice, and a full meeting of the 16-strong governing body will be held later this month to decide what action to take.
But despite their unhappiness, Mrs Shephard has indicated that she is minded to approve the application. A spokesman for the Department for Education and Employment said: "Parents voted for the school to go GM, and the Secretary of State has written to say that as they have voted for it, the application will go ahead."
Applications for GM status can only be withdrawn with the consent of the Secretary of State, and approval of Bennett's request would have set a precedent. It is unlikely, however, that the school will have to opt out from September 1 as was previously proposed. "We haven't agreed its GM status yet, we will have to wait until the proposal is reviewed for its starting date, " said the department spokesman.
Bennett Memorial had objected to Government demands that the school scrap a long-standing arrangement under which parents accepting a place at the school committed themselves to comprehensive education by withdrawing their children from 11-plus procedures elsewhere in Kent.
Governors said they believed that the character and ethos of the school was linked to the admissions policy. Their stance was backed by more than 800 Bennett parents, where support for GMS had previously been overwhelming, and where there are two pupils for every place.
A spokeswoman for Kent County Council said: "We entirely support the school's right to choose to remain with KCC. The governors and parents have clearly stated that is what they wish to do."
Although Gillian Shephard's decision has dismayed the school, it would have been politically embarrassing for her to agree at a time when few schools are applying to opt out.