Education chiefs have announced ambitious plans for a £27 million investment in the county's first city academy.

Under the proposals, Falmer High School in Brighton would be turned into a flagship education centre focusing on business and enterprise skills.

Sussex investment banker Jon Aisbitt - one of the richest men in the country - has pledged the £2 million necessary for the bid and if plans are approved the Government will contribute between £10 and £25 million.

The school in Lewes Road scored its best GCSE results in the past five years this summer with 32 per cent of pupils gaining five or more A*-C grades.

But the numbers are still well below the national average and headteacher Stuart McLaughlin hopes the investment and flexibility of being a city academy would allow pupils to flourish.

David Hawker, director of children, families and schools at Brighton and Hove City Council, said: "Falmer is a successful and improving school but is in an area with a certain amount of social deprivation and has a reputation it doesn't deserve.

"It's not the most popular of our schools and we have been looking at a number of options for its future."

City academies - Labour's "big idea" on reform of the education system when it came into power in 1997 - are state-funded schools run outside local authority control by private sponsors.

Ministers want to have 200 new academies in the pipeline by 2010 and there are about 40 being set up now.

Critics argue that they amount to selling schools "on the cheap" and Unison, the public sector union, has criticised the Falmer proposal.

Branch secretary Alex Knutsen said: "This is blatant privatisation of a core public service.

"The record of academies so far is that they create elitist schools run on business principles and at the expense of funding that would or could have gone to other schools in the city."

But Mr McLaughlin said the academy system would offer his school a new freedom to focus on basic literacy and numeracy skills and ICT for some pupils and accelerate learning programmes for more able pupils.

The academy would include sixth-form provision to encourage pupils to progress to higher and further education and would seek to strengthen links with the universities of Brighton and Sussex.

Mr McLaughlin said: "We have gone from strength to strength in recent years and it is crucial we build on this success to secure a bright future for the school.

"The academy option has a great deal of potential and is very exciting but we need to ensure that we have the support of the whole school community before making any commitments."

Mr Aisbitt was ranked 419th in the Sunday Times Rich List 2004 with an estimated fortune of £95 million. He was previously a partner of Goldman Sachs and is now a director of several financial companies.

He was a trustee and honorary treasurer of the NSPCC and is currently a trustee of New Philanthropy Capital which advises charity donors on how to make donations more effective.

He said: "I believe passionately in the importance of providing first class educational opportunities for all children and the Falmer Academy proposal is one that I'm delighted to be involved with."