VT Group will provide school support services with the county council, in a joint venture called Four S Services. It includes curriculum and technology support and management of catering, grounds maintenance and cleaning.

The Conservative-run council announced that VT, which builds warships for Oman, Quatar and the British navy, was its preferred bidder last July. The seven-year contract was signed last week.

Paul Lester, VT group chief executive, said that the contract set an important precedent and that “its success may bring opportunities to roll out this type of partnership to other local authorities throughout the UK”.

Some were surprised by the move. In May 2003 the Office for Standards in Education praised the council for its “many strengths and no weaknesses”. Last year nine of its schools were rated among the best in England by Ofsted.

Ray Lowther, Surrey Labour councillor, said: “Ofsted inspectors were happy with the education department. It’s surprising that part of the council has had to go out to a private enterprise.”

But Andrew Povey, Surrey Tory councillor, said the county has a history of innovation, having drafted in 3Es - a non-profit subsidiary of Solihull’s Kingshurst technology college - to run two secondaries and Nord Anglia to run another since 2000.

Mr Povey said: “We realised that if we wanted to remain one of the top-performing LEAs we would need a bigger educational unit than Surrey could maintain on its own.”

The former Tory whip Lord Wakeham was the chairman of VT in the 1990s, but Mr Povey said the group’s bygone Conservative connection did not sway the tendering process.

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