Jamie's London borough sacks Compass

The school dinner firm Scolarest, part of the catering giant Compass, has been ousted by London's Camden borough, home to the celebrity chef Jamie Oliver who has mounted a successful nationwide campaign to improve school meals.

Camden Council has awarded the £2.5m-a-year contract to a little-known catering firm, Cater Link. It provides meals for Parliament Hill School in Highgate Road, but this is its first deal to supply school dinners across a borough. Scolarest lost to Cater Link in the re-tendering after its three-year contract ended.

Scolarest had been dumped by four Camden schools after reports that it stocked Thai chicken in its freezers despite a European Union ban after the outbreak of bird flu in Asia. Some reports have accused Scolarest of serving up out-of-date food and operating in mice-infested kitchens.

Cater Link was founded in 1993 by Tony McKenna and provides 150,000 meals a week to schools, colleges, the healthcare sector and businesses. Mr McKenna said: "Our founding principle is to provide fresh food. In primary schools, there will be two main choices, one of which is vegetarian, all cooked on site with fresh ingredients."

Camden Council said it would increase its spending on a primary school meal from 60p to 70p, while spending on a secondary school meal will rise from 69p to 87p. Primary school pupils will be charged £1.70 per meal, compared with £1.45 previously. Camden has also decided to offer a Halal option to schools on request.

Natasha Seery, a parent who led the campaign to oust Scolarest from St Paul's Primary School in Primrose Hill, Camden, said: "I'm delighted Scolarest and Harrisons [which took over school meals at St Paul's], who have let us down, have been bounced out of the equation.... I think it is unrealistic to expect a decent, freshly cooked meal for much less than £1.70 unless it's been significantly subsidised. We don't want to be feeding our children cheap food again."

The decision to offer the contract to Cater Link must be ratified by the Schools Forum on Tuesday. A panel of head teachers, school governors and council officers put bids from four caterers to the test and submitted the menus to a dietician. The panel said Cater Link offered a "varied, imaginative, child-friendly menu" with organic options and healthy choices.