The Department for Education and Employment has removed technology college status from a Lancashire school at the centre of police enquiries about alleged financial irregularities.
The local education authority has since suspended Mansfield high school's delegated budget, and it now looks set to be the subject of an emergency HMI visit.
Hazel Harding, chairwoman of Lancashire's education committee, said the irregularities had been uncovered by auditors just before last Christmas. They involve a substantial sum of money and relate to "phantom pupils" said to be left on the Brierfield school's roll.
Headteacher Ernest Pickup is on leave, and bursar Peter Cowell-Smith has been suspended.