Hundreds of children could be forced to find new places after a recession-hit independent school went into administration.
The owners of Newlands School, in Seaford, were yesterday attempting to piece together a deal to save it from closure.
They said some parents had struggled to pay tuition fees on time or at all.
The school had already made ten staff redundant at Easter as it prepared to close its boarding and international section.
The latest crisis comes only three years after two parents rescued the school from bankruptcy under its previous management.
Owner Mike Holland said the mixed school had faced a constant struggle to attract pupils back after that disaster.
It has a capacity of 450 but was left with less than 100 in April 2006 when he and John Summers put together the rescue package.
The others had already moved to different schools before the deal was finalised.
Newlands currently has 297 children on its register.
Mr Holland insisted the school was “continuing as usual” at present but its future hinged on a bid to transfer its ownership to a new company.
The current firm Newlands College Limited has gone into administration after a winding-up petition was served.
The company has substantial debts and owes a significant amount to HM Revenue and Customs.
Mr Holland said he was unwilling to divulge figures.
Matt Roger, spokesman for administrators Tenant Recovery, said: "The school is in the process of transition and change from one company to another and they will continue to operate as usual at the moment."
Mr Holland said he hoped the transition would be seamless and the school would be able to continue.
He added that previous staff reduncancies due to the closure of the boarding and international section were also because of the economic climate.
He said: "Because of the recession the prospect of families in China and elsewhere sending their children here has become unlikely so we decided it would be best to discontinue."
He added the school had been badly affected by parents not paying fees on time or at all in some cases. Its sixth form has struggled to recruit pupils.
Latest national figures show independent schools have closed at a rate of two per week since Christmas as parents have struggled with fees in the recession.
In March cash-strapped St Mary's Hall School in Eastern Road, Brighton, announced it would close at the end of the term and be taken over by Roedean girls' school.
But other independents have declared themselves stable despite the gloomy outlook.
Richard Cairns, headmaster of Brighton College in Eastern Road, Brighton, said it was receiving more applications than ever.
He said: "It is the smaller schools which are having problems because they don't have the benefit of economies of scale."
A winding-up hearing for Newlands College Limited was adjourned at the Royal Courts of Justice in London yesterday until June 17.
HM Revenue and Customs said it could not comment on the issue for confidentiality reasons.
Newlands headmaster Chris Bridgman declined to comment on the situation.
Seaford Town Councillor Bob Brown said it was bad news for the town that the school was undergoing more financial problems.
Mr Brown said: "Newlands is an important part of the education provision in this area."
John Summers said he relinquished his stake in the school in August after injecting £200,000 for its future well-being.
He was replaced as a director of Newlands College Limited by Mr Holland's daughter Samantha Holland.
Mr Summers said: "I handed over my ownership at a time when the school was growing well and in good shape."
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