An agreement to run a charter school at Whangaruru could be canned, with the Education Minister proposing its closure based on only a "marginal improvement" in teaching.
The Ngā Parirau Mātauranga Charitable Trust, which runs the school in Northland, met with Education Minister Hekia Parata yesterday.
A specialist audit in October showed while the board had made "significant progress" in addressing governance and management, the "core business" of teaching and learning had got slightly better for some students, but not for all and "not in a sustainable way".
"Even with the resources and support that have been provided, the gains in educational outcomes are unlikely to be significant and future prospects are equally small. This is ultimately what partnership schools are about – raising the achievement of students," Ms Parata says.
The trust was handed a performance notice in February requiring it to take immediate action to address concerns raised.
The school's apparent failure has had opponents of charter schools saying the Government has to stop more of the schools opening.
Among the problems at the school were the poor levels of teaching quality and student achievement, inadequate curriculum leadership and lack of basic literacy and numeracy underpinning qualification credits achieved.
Ms Parata says in proposing the closure, she has "reluctantly concluded that the challenges facing the board and the kura are too great to overcome".
The board has a month to give feedback on the proposal to end the contract on March 7. If the final decision is to close the school, the students will be transferred to other educational providers.
Labour's acting education spokeswoman Jenny Salesa says the school's 39 students are the victims in the ACT-led policy.
"The losers are the taxpayers, as are the kids at schools down the road who receive about a quarter of the funding that went into Whangaruru," she says.
She says the money spent on buying the 81-hectare farm should be recouped by Ms Parata and put back into the education sector.
Greens education spokeswoman Catherine Delahunty says the failed experiment "should never be allowed to be repeated on others".
"These kids were the unwitting victims of the charter school experiment and the minister must now promise all the resources that they need to ensure their education can be salvaged."
New Zealand First education spokeswoman Tracey Martin says the school should never have opened at all.
There were now questions about what would happen to the farmland the school was built on, she says.
In July, the minister allowed the school to continue operating because of concerns about the students, many of whom faced significant educational challenges and had been excluded from other schools.
Twenty-six charter schools have applied to open in 2017.