Plans for a new city academy have been thrown into doubt after a mystery businessman withdrew £2 million backing.

Without the money, a merger between East Brighton College of Media Arts (Comart) and Whitehawk Primary School, is unlikely to go ahead.

Schools councillor Pat Hawkes, told a Brighton and Hove City Council meeting the sponsor had withdrawn his bid because of a legal technicality.

She denied it had anything to do with the school's truancy rate, which was revealed after publication on Thursday of Government league tables to be the second worst in England.

Coun Hawkes said: "We are disappointed and the director of education has written to all the people involved, including the parents.

"But we are not despondent. We are determined to keep on improving the schools.

"We will be having a discussion with all parties as to how best we can focus our help on the schools. We will look at all the innovative ways of supporting them."

Plans for the city academy first came to light last year when The Argus revealed the council had been approached by the United Learning Trust, an independent agency, which sets up academies across England.

Government policy is that start-up money of £2 million must be available for each academy which in turn attracts £8 million of public money.

But because the businessman had withdrawn his £2 million, the council can no longer unlock the Government cash.

Coun Hawkes said the school was still improving and being well run without the bid and it was just a hardcore of students that were causing problems.

She said: "Things have improved since the truancy figures, based on last year. The young people at Comart who are going to school and working hard, are achieving.

"It is the small hardcore, either the parents who are not pushing their children or the children themselves who are not going.

"We are trying to work with the parents as well as the children and trying to get them into the school."

Liberal Democrat councillor Jenny Barnard-Langston told the meeting: "A period of stability will do the school a great deal of good with less publicity about changes of name and sponsor."