CfBT Education Services, the backer of the country's first City Academy, have told ministers that they cannot raise the £2 million donation promised to the scheme. Government officials are now seeking alternative backers for the Lambeth Academy, due to open by September 2002, but insisted that the academy was not in danger of being axed.

The failure to meet the first sponsorship target is an embarrassment for the government which stated that the network of academies across the country would "break the cycle of educational under-achievement in our inner cities".