GOVERNMENT officials yesterday appeared to backtrack over reports that Middlesbrough's £18m Unity City Academy would become the first of Prime Minister Tony Blair's flagship schools to be failed by Ofsted in a report due out next month.

Yesterday, a spokeswoman for the Department for Education and Skills (DfES) said: "This is a report by Ofsted and it is not for us to comment on until Ofsted has actually published it."

But on Monday, a spokesman from the department was quoted as saying the school was judged to be failing by Ofsted and as a result was being placed into special measures.

Unity City was among the first three privately sponsored academies to open across the country, but has suffered from a high-pupil exclusion rate and poor exam results.

Staff at Unity are also being balloted from Friday over strike action in a dispute over changes to contracts and conditions, while there is the possibility of redundancies after the school overspent its budget.

Sue Percival, a Cleveland- based national executive member with the NAS/UWT teaching union, said: "It would not surprise me if the school has failed to make the mark because of all the other problems that have been going on there."