The official admissions body has stepped in to save an "unpopular" Roman Catholic school, saying its closure would discriminate against Catholic parents.
Wirral council, Merseyside, attempted to shut St Paul's primary as part of a purge on surplus places, insisting that keeping the school, which has 83 pupils and is only three-quarters full, was a waste of money.
In a report, officials said St Paul's cost more than pound;1,000 per pupil more to run than other schools and the authority would save pound;100,000 with its closure. It also pointed out there are three other Catholic primaries within walking distance.
But the Office of the Schools Adjudicator blocked the move, saying any savings were outweighed by Catholic parents' rights to have a faith school on their doorstep.
June Brown, the adjudicator, said: "Even if places were to be made available at the (three other) schools, for many parents the difficulties of travel would prove prohibitive. Effectively, therefore, the closure of St Paul's will remove the choice of a Catholic education for many local parents.
"It is my judgement that the relatively small savings to be made do not justify the closure of this highly-valued Catholic school that serves an area where levels of deprivation are high."
According to the council, spending per pupil at St Paul's, which is rated as an "effective school" by Ofsted, is pound;3,880 compared with the Wirral average of pound;2,737.
Keith Porteous Wood, executive director of the National Secular Society, said: "The LEA has a duty to all children in its area. To spend that huge amount on a small, relatively unpopular, school seems completely unacceptable."