There is a school in the North-east where 600 families compete every year for 200 places. Its academic results - 99 per cent of pupils gain five A-Cs at GCSE - place it at the top of the nation’s league tables.

Every year pupils win places at Oxbridge. It is a modern, purpose-built centre of excellence, where the ethos is Christian and where old-fashioned values rule.

Emmanuel College in Gateshead is not a private, fee-paying establishment but a school that serves a deprived working-class area of Tyneside.

A city technology college, the school is closely associated with one man: Peter Vardy. As well as being the school’s chair of governors, Vardy is the chairman of a car dealership founded by his father, Reg Vardy. He is also Emmanuel’s main benefactor.

Over a 10-year association with the school, Vardy has spent about pound;2 million. As one of four business sponsors, he first helped to raise pound;1.8m towards the capital costs of building and has since funded extensions to the school to meet increasing demand.

The archetypal “local lad made good”, Vardy identifies with the community and the value of education, and his non-conformist Christian beliefs inform a school ethos in which children are encouraged to realise their God-given gifts.

He belongs to the Bethany Centre, a free evangelical church in which there is no hierarchy, no ceremonial and where people worship God in their own way.

Like the 19th-century Quaker factory owners such as Joseph Rowntree and Andrew Carnegie, who poured their huge wealth into good deeds, Vardy’s gifts are an expression of his beliefs. But modesty does not permit him to accept the analogy. “I wouldn’t say I was a philanthropist. I could have a yacht and a villa in the south of France, but that sort of thing just doesn’t interest me. God has blessed me for a purpose,” he says.

Vardy is passionate about education and serious about sponsorship. A Stock Exchange flotation in 1989 gave him a 30 per cent stake in Reg Vardy plc, which this year turned over pound;1.25 billion. And as the value of shares in the company has soared, so the family trust fund he set up to back worthy causes has become even more active.

Every year, the fund has donated up to pound;2m to worthy causes, including a water tower in India, a school in Africa and the rescue of a local private church school that was down on its pecuniary luck.

But now Vardy has upped the philanthropic ante by offering pound;12m to endow six city academies across the North-east. He is aiming to replicate the results of Emmanuel College, which has succeeded - against the odds, it seems - in raising standards in a deprived working-class area. With a big bankroll and a social conscience, you might think an educational angel such as Vardy would be welcomed with open arms in a Britain under New Labour. Yet his plan is not going smoothly.

In fact, local education authorities are giving the cold shoulder to the car dealer and his millions. Gateshead has accused Emmanuel College of creaming off the most able pupils and has refused his offer of a new academy. Newcastle has rejected his master plan. Sunderland is still deliberating. So far, only Middlesbrough has accepted motor man’s money.

Ironically enough, the Department for Education and Employment wants LEAs to be involved in assessing the need for city technology coleges and is keen to bring local authorities and business sponsors together to address this issue. To date, Haringey, Middlesbrough, Brent, Liverpool and Lambeth have requested city academies.

“We envisage that sponsors like Peter Vardy will want to work with LEAs to identify where city academies represent a positive way of tackling underachievement,” a DFEE spokesman says. “I don’t know why Gateshead has turned its back on a city academy if, indeed, that is the situation, and you can’t read this situation as representing all LEAs.”

The allegations of academic cherry-picking are ones that Vardy and Emmanuel’s headteacher, Nigel McQuoid, vehemently deny:

“Decisions are made on the basis of a non-verbal IQ test,” says McQuoid. “When we were set up we were told by the Government that we had to take children from each ability band. Scientifically we are a perfectly comprehensive intake.”

Vardy adds: “Two-thirds of our pupils are from areas of high or very high deprivation.”

It could still be argued, however, that Emmanuel’s “comprehensive” intake is not truly representative of the area in which it is situated, and while Vardy and McQuoid insist that the intake is carefully gauged to ensure a cross-section of abilities, other schools in the area appear to have much higher concentrations of underachievement.

Unlike the old-style city technology colleges that operate outside the control of local education authorities, the Government wants the new academies to be jointly run by the town hall and the private sector. But Vardy has no truck with local politicians; he speaks of mismanagement, and poor resourcing.

“If the LEAs are going to become involved in running city academies, they might as well get on and run the whole show themselves. With a partnership approach things tend to fall down the cracks in the middle,” he says.

With 100 per cent of its funding from central government, Emmanuel is run by a governing body comprising some heavy hitters in the management world: a finance director, a personnel director, and a marketing director whose job it is to make sure the teachers get full support and the best resources the private sector can procure.

Vardy talks of tight financial control, target-setting, performance management and appraisals for staff. And in case critics say that these industry bosses are venturing where angels and educationists fear to tread, Vardy has co-opted an LEA adviser on to the board: Derek Esp, a former director of education in Cambridge.

Despite the setbacks, Vardy still believes he can pull off his grand bequest. Like his motor empire that grew from a garage forecourt in Houghton-le-Spring, Vardy envisages a tightly knit network of city academies, with Emmanuel College as the headquarters and main showroom, and he plans to use the same formula that transformed Reg Vardy plc into a company with 80 dealerships across the UK.

If the Government is prepared to bend the rules, and if LEAs can bear to relinquish control to an unconventional philanthropist with a track record in raising standards, Vardy may yet succeed. And if his religious beliefs allow little room for compromise, he is still wise enough to understand his limitations and insists he has unbounded admiration for anyone who can turn around a failing school.

“Superheads are on a hiding to nothing,” he says. “If you ask me, ‘Can we achieve the same results with a failing school?’, the answer has to be no. The point about Emmanuel was that we started with a brand new school and a clean sheet of paper.”