A NEW report claims a controversial education reform initiative is beginning to produce results, despite the failings of a North-East city academy.

And the Government has vowed to push ahead with plans to create 200 city academies following the publication of PriceWaterhouseCoopers (PwC) analysis.

Eleven academies were initially created to replace under-achieving schools in areas of social and economic depravation, two of them in Middlesbrough.

Last month, Unity City Academy failed an Ofsted inspection, resulting in special measures being imposed.

However, King's Academy received a glowing interim report and its sister school, Gateshead's Emmanuel College, has performed extremely well since it opened.

Nationally, the PwC report found high levels of parental satisfaction with their children's education, discipline and attendance.

Its assessment of academic results was not as impressive, however, showing that GCSE results have improved in six academies since 2002.

The report also highlights the benefits of private sponsorship, such as Sir Peter Vardy's backing of King's and Emmanuel academies, saying this has helped raise the aspirations of students.

Nigel McQuoid, principal of The King's Academy, Middlesbrough, said: "Not only was The King's oversubscribed on day one, but our popularity with parents has continued to grow and we are once again oversubscribed this year.

"If we can continue to develop after what has been a good start, then I am absolutely confident that our parents will be wholly satisfied with what we offer."

The report said the academies faced challenges in how best to strike a balance between new and existing staff and problems with bullying.

Mr McQuoid said bullying at King's had virtually disappeared.

And despite recent criticism, Unity Academy's chief executive, Joe McCarthy, believes the school is on the road to recovery.

He said: "It's coming together very nicely. We are working our way through the industrial dispute with the NASWT teaching union and things are definitely starting to look up for the future."

Schools Minister Jacqui Smith said: "This is a positive endorsement of the academies programme and gives ground for optimism for the future. Tackling an inheritance of failure can take time."

The report is the second of a five-year programme of evaluation commissioned by the Department for Education and Skills to monitor the effectiveness of academies.