A private school that faced losing its charitable status has won a reprieve after tripling the number of free places it offers to poor children, it emerged today.
St Anselm's, a fee-paying prep school in Derbyshire, failed the new public benefit test last year after the Charity Commission ruled it was not providing enough subsidised places.
The commission is due to announce that the 230-pupil school in Bakewell, has met the test by increasing the number of free places it offers from one to three, with the bursaries worth 100 per cent of the fees.
The move is likely to have implications for other fee-paying schools, who could be forced to offer more free places in order to retain their charitable status.
The Independent Schools Council (ISC), which represents private schools, has previously raised concerns that the commission was taking a "narrow approach" to the rules, and it today confirmed that it is seeking a judicial review of the guidelines.
Under the rules, to keep their charitable status and the tax breaks that come with it, private schools must prove they benefit children who cannot afford their fees.
S. Anselm's was one of five schools which took part in the commission's first assessments on the test last year.
The school was one of two, along with Highfield Priory in Lancashire, that failed because of a lack of subsidised places.
Both were praised for working with the wider community, sharing facilities with state schools, and offering joint classes with state schools.
S. Anselm's headmaster Simon Northcott said he was "delighted" that the commission had recognised the changes the school had made since last year's assessment.
"We believe that they are in proportion to what we can meaningfully provide and sustain in the future," he said.
"Given many of the particular issues that affect S. Anselm's - including its rural location, child protection as a result of the age of young boarders, and it has no endowments - we feel that in the current economic climate it would make life difficult should we be required to do substantially more."
The three bursaries will cost S. Anselm's £33,000 to fund, around 1.1% of its gross fee income.
ISC chief executive David Lyscom said: "We are delighted that the Charity Commission has reacted positively to S. Anselm's plan for the future.
"But this decision does little to lift the uncertainty for charitable schools about what they need to do to meet the commission's public benefit test. Nor does it resolve our concern all along that the commission's interpretation of public benefit is too narrow and deeply flawed.
"This is not just about individual schools. The entire sector is at the whim of the commission's prevailing and subjective view as to what is "sufficient" for a school to get the all-clear."
The commission is "deliberately overlooking the indirect benefits the private sector offers", Mr Lyscom said.
He added: "Having sought and failed to bridge the gap between the commission's approach and the law by agreement, ISC therefore had no alternative but to challenge the commission in the courts.
"Given the widespread controversy caused by the commission's approach, it is important that it should be tested at law."