Educational computing company RM is considering reviving its work on software for schools following the imposition of restrictions on the BBC's digital curriculum project.
The Oxfordshire-based company stopped developing a series of educational programs two years ago because investors feared they could not compete with the pound;150 million BBC curriculum website, which will provide free materials for teachers from 2006.
However, this week Tim Pearson, RM chief's executive, said the company was reconsidering its decision after the Government and the European Commission moved to restrict the BBC's digital output.
The commission has demanded that the UK Government ensure that funding is available to alleviate any distortion the BBC project creates in the educational software market.
Mr Pearson, whose company had led attacks on the Digital Curriculum, said:
"We now view this episode as effectively closed."
RM's preliminary financial results, released this week, gave it additional cause for optimism. The company had warned in May that the budgetary difficulties faced by schools could cut spending on its IT products. But its results showed a 72 per cent leap in annual profits to pound;8.6m and a 17 per cent rise in turnover to just under pound;215m.
RM hopes that headteachers will face less uncertainty about their budgets next year, placing it in an even healthier position.
The company's most recent contracts include establishing a national database of pupils for Wales and developing an online assessment system for the Qualifications and Curriculum Authority.