One of the country's biggest academy chains is to lose control of 10 of its schools in a move which has increased pressure on Education Secretary Michael Gove to give inspectors powers to inspect all chains.
E-ACT, which was censured by the Education Funding Agency last year for lavish spending on hospitality, is to hand control of the 10 back to the Department for Education to find new sponsors after inspections of 16 of its schools are understood to have found serious concerns over education standards.
The charity sponsors 34 state-funded schools and the decision to ditch the 10 represents the biggest wholesale withdrawal from academies by any one sponsor. Six of the 10 to go are understood to be Trent Valley, Sherwood, Dartmouth, Forest, Leeds East and Leeds West
The decision to release them, taken in conjunction with the DfE, comes against a growing background of pressure on Mr Gove to give education standards watchdog Ofsted the power to inspect academy chains - most notably from his Liberal Democrat deputy, Schools Minister David Laws, in an interview with the The Independent.
Chief schools inspector Sir Michael Wilshaw and Tristram Hunt, the Labour Shadow Education Secretary, have also backed moves to strengthen the inspectors' powers.
The latest person to add his weight to the clamour is Jonathan Simons, head of education at the Policy Exchange think-tank founded by Mr Gove. He said: "Under-performing academy sponsors cannot be immune from the... high expectations government should have for all institutions."
Mary Bousted, the general secretary of the Association of Teachers and Lecturers, added: "Try as it might, the Department for Education cannot run schools from Whitehall."
"The worst part of this latest failure is the impact on pupils and staff. Mr Gove has to ask himself is toying with students' life chances really worth his political dogma."
In the case of E-ACT, Sir Michael decided to launch individual inspections of nearly half of its schools under existing powers to carry out emergency inspections of schools after the chain had run into trouble last year following the EFA report claiming "weaknesses" in handling the schools' accounts.
The report, which criticised monthly lunches at London's prestigious Reform Club and first-class rail travel for senior executives, led to Sir Bruce Liddington, head of E-ACT and a former head of the academies programme at the Department for Education, giving up his post.
Crucially, during the inspections, inspectors asked additional questions at all the schools aimed at ascertaining the amount of help the schools received from the chain to raise standards for pupils and improve overall school performance.
As a result of the inspections, E-ACT decided to relinquish control of 10 of its schools - saying it hoped this would help it to concentrate of those of its schools it could help.
Ofsted said it expected the reports on the schools to be published within the next few weeks. Those being released have not all been inspected during the recent blitz and, according to one source, reflected putting right some of the decisions by the previous regime at E-ACT.
The Department for Education said it would actively address underperformance in any schools, "no matter who controls them".
"That's true for academies and free schools as it is for council run schools," a spokeswoman added.
"We welcome E-ACT's decision to hand over a number of their academies to new sponsors. We hope this will mean E-ACT is free to raise standards in their remaining schools."
Ofsted said it had inspected 16 of E-ACT's schools, adding: "During these visits, inspectors asked additional questions to ascertain the extent to which the support and challenge provided by the Trust is helping to raise standards for pupils and improve overall school performance."
The decisions comes amidst speculation of a rift between Sir Michael and Mr Gove - hotly denied by the Education Secretary - with the news that two right-wing think-tanks close to Mr Gove are planning to publish reports critical of Ofsted.
Sir Michael appears to have asserted his independence in mounting the inspections at E-ACT schools, and found a way of highlighting the performance of academy chains without having the power to inspect them.
Tristram Hunt said: "David Cameron and Michael Gove are allowing under-performance to go unchecked in academy schools and free schools. A complete lack of local oversight and the practice of allowing unqualified teachers in these schools has meant poor standards of education are allowed to set in.
"Michael Gove is refusing to take action that's needed to prevent standards slipping."
A spokeswoman for E-ACT said: "E-ACT has been working with the DfE to identify where we're best placed to make a significant difference to our academies.
"Our pupils, parents and staff deserve strong support and leadership. Our focus is on where to provide this and to allow others to deliver elsewhere."
It was understood last night that the 10 schools were unlikely to handed over to other large chains - but to academy sponsors serving in their regions.