A private profit-making Swedish company has won a £21m contract to manage a proposed free school in Suffolk.
But the controversial proposals are expected to raise political issues about boundary between free schools funded by public money and the involvement of the private sector in state education.
The 10-year contract for Breckland Free School was won by IES UK and is believed to be the most extensive of such school management contracts to date, according to a report by the BBC.
While free schools cannot be run for profit, their trusts can buy in services from private firms. Free schools are funded from the public education budget - but the schools are run independently.
The final proposals for the secondary school in Brandon are expected to be submitted this week, while those involved in setting up the school expect to hear in January whether it has been approved by the Department for Education.
Lack of places
The BBC reports that the local families wanting to set up the school in Suffolk say that it will address the need for a secondary school in the area.
The site for the proposed school, which they want to open for 300 pupils in September 2012, would be in school buildings which will be vacant in the autumn.
Sabres Educational Trust - the group wanting to set up the free school - is proposing that it should be managed by a profit-making company, IES UK. It is the UK arm of a Swedish company which runs chains of free schools in Sweden - the inspiration for England's free schools initiative.
Alicia Rickards-Ottevanger, one of the group of local families supporting the free school plan, told the BBC that the Swedish firm had been chosen because it seemed closest to the trust's ethos for the school, regardless of whether they were a profit-making business.
She said the proposed free school was a practical way of addressing the lack of a school for families in the area. "It was this route or nothing," she added.
Gordon Warnes, chairman of Sabres said he hoped that "Breckland Free School will become part of a worldwide network of international schools providing an amazing array of opportunities for students and community".
Not for profit
Commenting on the £21m contract, a Department for Education spokesperson told the BBC: "Free schools are funded like all other state-funded schools - on a per pupil basis.
"Over 10 years a successful, fully-subscribed school of this size may well see this level of revenue funding to pay for pupils' education. From this, like any other state-funded school, it would have to pay for its substantial operating costs."
The department added: "Free schools founders do not and can not make a profit.
"State schools and their local authorities have always been able to use companies to help them run services in schools - from human resources, to ordering stationery, to school catering and providing educational advice.
"In this case, the free school's charitable trust has decided that it wants to draw on the expertise of an established education company, with a proven track record of running good schools."