A debt-ridden school could be replaced by a newly built £27 million academy partly funded by a private backer.

West Sussex County Council is looking into the possibility of Littlehampton Community School becoming the first academy in the county.

Mark Dunn, the councillor responsible for education, said: "Although there is still a lot of work to do to make these plans a reality, the feedback we have received from government so far has been very encouraging."

The council plans to ask to the education department to consider the school in the next round of academies.

In December, Tony Blair announced he wanted to double the target number of academy schools nationwide from 200 to 400 by 2010.

The new-style schools have been promoted as a way of bringing private investment into education.

If councils can find a sponsor willing to provide £2 million, the Government will provide an additional £25 million to build an academy.

Until now they have been used to replace schools in deprived areas.

The Government has loosened the restrictions on where they can be built but still wants them to be used to regenerate areas.

Littlehampton Community School finished 2005/6 £312,317 over its budget and 2004/ 5 with a £174,975 deficit.

In November, the council launched an ambitious plan to rebuild the school and put forward £10 million towards the project - but a bid to secure government funding for the rest of the work failed.

Littlehampton headteacher Jayne Wilson said: "Previously, academies were for inner cities and for failing schools. Littlehampton Community School is neither of these.

"The change in criteria, the opportunities for curriculum innovation as well as the new school build makes the academy an attractive option."

The council is working to identify a sponsor for the project.

Parts of Bognor, Worthing and Crawley also meet the qualifying criteria for an academy.

Until now, the academy proposed to replace Falmer High School in Brighton has been the only one in Sussex.