Local authorities are to play a key role in scrapping the quango which funds grant-maintained schools.
New members of the board of the Funding Agency for Schools, chosen by David Blunkett, include the chair of the Association of Chief Education Officers, an ex-deputy leader of Sheffield Council and the former secretary of the Association of County Councils.
They are among eight appointments made by the Education Secretary this month as part of the Government's commitment to abolish the GM sector.
Their unpaid task will involve winding up the organisation, set up by the Conservative government more than three years ago to administer finances of grant-maintained schools.
Nearly 250 employees could lose their jobs when the FAS is closed in March 1999. The 49 staff loaned to the FAS from Government departments will return to them.
Sir Christopher Benson, chairman of Sun Alliance and a Tory supporter, has already quit his part-time post as FAS chairman and Sir Anthony Tippet, a retired vice-admiral, has taken over the top job.
Out too now are Sir Robert Balchin, chairman of the Grant-Maintained Schools Foundation, and Edward Lister, the Conservative leader of the London borough of Wandsworth.
Sir Stanley Kalms, founder of the Dixons chain and a director of the right-wing Centre for Policy Studies, resigned from the board in June. Membership of the board was not renewed for Canon Gerald Greenwood, recently retired diocesan director of education for Southwark, Lee Karu, barrister and Muriel Ryding, head of The Baines School, Poulton-le-Fylde.
Controversy dogged the original appointments with most members vetted to ensure they held acceptable views on the GM status. The new board now also includes an ex-president of the Secondary Heads Association.
The newcomers are the Rev Dr Alan Billings, an ex-deputy leader of Sheffield Council, Roy Jobson, Manchester's chief education officer and chair of the CEOs' association, Louise Kidd, former principal chief executive of Rutland College and ex-president of SHA, Robert Lloyd, head of Hendon GM school and Robin Wendt, the former Association of County Councils secretary.
Stella Earnshaw, former head of the regional finance unit of Shell International and John Chastney, a former civil servant, will take up appointments on April 1.
They will replace Brother Francis Patterson, from St Francis Xavier GM College in Liverpool, Dr Arthur Hearnden of the Independent Schools Joint Council and Professor Arthur Pollard, who is the education spokesman for the East Riding of Yorkshire.