£500m rescue package for five privately-financed BSF schools

The European Investment Bank is putting together a £500m funding rescue package for up to five privately financed Building Schools for the Future schemes.

But the fate of another18 privately-financed BSF schemes worth around £1.3bn - which are due to close by December 2009 - remains in doubt.

Partnerships for Schools director Paul Milner said: "The beauty is the EIB is able to fund 50% of the projects' senior debt requirements. The bank is offering more favourable terms than commercial banks. It has expressed interest in funding a number of projects in the early part of the New Year."

Milner said the Government remained fully committed to BSF, but if the banking crisis continues into next year a Government bail-out could be on the cards.

Milner said there was still healthy competition for BSF schemes with 25 active bidders circling.