Teachers probed over £1million 'fraud'

Five teachers have been suspended after £1million was found to be missing from the accounts at an inner-city school.

Three deputy headteachers and two assistant heads have been sent home and told to stay there until Hackney auditors finish their work. The Met's Economic Crime Unit is probing the alleged fraud ring after local authority auditors discovered a £975,000 deficit at the comprehensive.

The Learning Trust, the notforprofit charity that runs education in Hackney, admitted it had known for more than a year that the school was deep in the red.

But auditors only discovered the size of the hole when investigations began after the trust removed the school's power to manage its own budgets in September 2003. The trust made its move shortly after the head of three years, Neil McDonough, left the school.

He was replaced by a temporary head, Jenny Pick. There is no suggestion either she or her successor, current head Miriam Kerr, are involved in the investigation.

Neither the current nor former heads could be contacted for comment. Well-placed sources said the council acted after becoming alarmed about lax financial controls at the boys' school, which has more than 1,000 pupils aged 11 to 16.

In January this year, the school bursar's contract was terminated and the finance officer was suspended the following month.

Alan Wood, chief executive of the Learning Trust, said: "We've already taken steps to secure the

financial management of the school and support the education of the pupils. Our rigorous investigation will expose any wrongdoing and we will take legal action if necessary."

A Scotland Yard spokeswoman said: "We can confirm that the Met's specialist crimes directorate has received an allegation of conspiracy to defraud. The allegation relates to an educational establishment in east London.

"An initial assessment is being undertaken by officers from the Economic Crime Unit. There have been no arrests and we're not prepared to discuss the matter further at this stage."

Homerton serves one of the toughest parts of inner London and has not been a popular choice with parents in recent years.

This year it received only 60 applications for 210 places, even though Hackney has a severe shortage of space in its secondary schools. Last year, only 36 per cent of pupils got at least five grade Cs or better at GCSE, compared with the national average of 51 per cent.

Local education chiefs say the best way of rescuing the school is to turn it into a City Academy. They have asked the Government for the millions needed for rebuilding.

Last year, a former nun was jailed for five years for stealing as much as £500,000 from the Kent school where she was headmistress. Colleen McCabe, 51, went on shopping sprees that "would have made Imelda Marcos proud" at the expense of St John Rigby College in West Wickham.