A new education trust is to be brought in to run the Al-Madinah free school in Derby.
The move follows a highly critical Ofsted report in which the Muslim school was described as “dysfunctional” and rated inadequate.
The current trustees have agreed to resign along with the chair of governors, Shazia Parveen. The Greenwood Dale Foundation Trust has been asked to work with the school.
Education minister Lord Nash wrote to the school: “I am not satisfied that you have demonstrated a strong basis for the transformation required at the school.
“I cannot tolerate any child experiencing a poor quality of education in any state funded school and am therefore determined to ensure there is a swift resolution…
“The Greenwood Dale Foundation Trust has a track record of providing high quality education to children from a Muslim background and I have no doubt they will apply this expertise at Al-Madinah.”
Ms Parveen issued a statement in response to Lord Nash’s letter. She said: “The trust will ensure that the transition of Al-Madinah is smooth and the ethos of the faith designated school remains secure.
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“We acknowledge the positive input to allow or children to progress and have an academic success and a positive future.
“We also would like to make a request to all media to allow us to continue our vision to educate and inspire.”
On Friday, a DfE investigation into the school’s finances was also published.
The report highlighted the school could not demonstrate that it was maintaining proper accounting records as required by the Companies Act.
It also identified irregular payments of £19,188.85 which included duplicated payments to a supplier.