Teachers who lost their jobs when a school closed could win hundreds of thousands of pounds in compensation after winning their case of unfair dismissal.

The ruling affects 38 teachers from Newlands School in Seaford, who were among 200 staff who lost their jobs when the school closed last April without warning.

On March 31, staff were told they would not be paid that month's wages because the school was in "financial dire straits".

Four days later, the school announced it was closing and all staff were immediately made redundant.

The private school, which charged up to £17,850 a year in teaching and boarding fees, was pushed close to bankruptcy by a loan taken out by its governors to pay for an expansion.

Former head of history, Andrew Bonner said the effect was devastating. He said: "My second son, Hugh, was born on the same day. I left the meeting and went straight to Eastbourne Hospital where I watched him being born.

"I had such mixed emotions, I was devastated at the loss of my job and overjoyed at the birth of my son. Initially I thought I'd easily pick up a job by September but I wasn't able to."

Some teachers have gone back to work at the school after it was rescued by wealthy benefactors Mike Holland and John Summers and re-opened in September but many have found it difficult to get work.

In the next few weeks, Mr Bonner and his wife Keta and sons George and Hugh will move to Lincolnshire where Mr Bonner has finally been able to get work.

He said: "It is a step down for me, I have taken a post as a teacher rather than head of department.

"With estate agents' fees and solicitors' fees and everything else it has probably cost us £10,000 to move."

Mr Bonner and his former colleagues are hoping yesterday's ruling will provide them with some compensation.

At an employment tribunal yesterday, chairman Stephen Vowles awarded the teachers a 90 day protection order, the longest he could make, which will entitle them to 90 days pay.

Mr Vowles agreed the school had breached teachers' contracts by failing to pay their wages for March, failing to pay tax, National Insurance and Teachers' Superannuation contributions, failing to pay holiday entitlement and failing to give proper notice. The teachers can now claim this money back.

Mr Vowles said 29 of the 38 teachers could make a redundancy claim against Newlands. The remaining nine had either not been employed at the school for the required two years or were over 65 and not eligible.

Teachers have until January 19, 2007 to submit their individual claims against the school, each one will be heard at an employment tribunal this year.

Mr Bonner said: "We feel vindicated today. The school was found to be in error, and hopefully now we will be compensated for the dreadful way in which they treated us."