Parents and staff of a prestigious public school that suddenly closed have spoken of their horror over secret plans to build houses on the site.

The Chittenden family, which owns the school, refused to transfer the lease of Newlands School in Seaford last week after an 11th hour agreement between the governors and independent schools group Cognita to save it from financial ruin.

The £17,850-a-year independent school was closed on April 4, leaving 450 students, 30 per cent of whom are dyslexic, in limbo just six weeks before many are due to sit their GCSEs and A-levels.

At the time the Chittendens said they were "disappointed". But it has emerged there may have been a secret agreement between the family three years ago and Brighton-based developer Allum Estates.

The legal documents signed in August 2003 detail the "extinguishment" of the school lease to help the developers move into the school as part of a "joint venture agreement".

The family and the company would split the profits 60-40 from a 21-year building programme on the 23-acre site.

The Chittendens agreed they would not create obstacles for the plan to happen - effectively preventing them from agreeing to any rescue attempt from outside.

Headteacher Oliver Price said: "I just couldn't believe anybody could plan such a thing and so clearly destroy such a great school."

Martin Blocksidge, chairman of governors, said: "The governors are very shocked and disappointed to suddenly hear of this."

There are still many pupils without a new school, including 40 students who returned from a school trip to Sri Lanka last night.

Among them is 14-year-old Katie Champion, who has attended the school since she was two. Mum Julie Champion, 45, said the family's agreement was "despicable".

Nigel Davies, 43 who has found places for his three children Natalie, 13, Matthew, 12 and Zoe, eight, at St Bede's School, said the financial woes of the school must have been known by key players a long time before the sudden panic and closure.

Graeme Mackie, 51, whose 14-year-old dyslexic son has had to settle for a place where he will not get similar support, said the revelation reinforces his belief staff were unaware of the financial crisis.

Brighton and Hove city councillor Lynda Hyde's granddaughter Eleanor Williams, 14, returned from the trip to Sri Lanka last night. Coun Hyde said: "They mention extinguishment in the agreement but what they're talking about is the extinguishing of the children, their education and the surrounding community."

Lewes MP Norman Baker said "the family should examine their consciences".

The Chittendens refused to comment.