A free school based in Chester says money spent setting up the project was used ‘correctly and appropriately’ after Private Eye reported companies owned by the founders were paid more than £100,000 from school funds.

St Martin’s Academy in Hoole Road, Hoole, was established by headteacher Stephen Docking and Ofsted inspector Iain Colledge through their not-for-profit company North West Academies which recently expanded to open Oak View Academy, formerly Greenfields Primary School, in Winsford.

As well as being head of Delamere CE Academy, Mr Docking is sole director of a company called ACT Education which received £61,076, according to the school accounts for the year up to August last year before pupils started in the September.

Mr Docking, a governor at the school, lives with Wenda Smith, who was appointed headteacher of St Martin’s in 2012 and was also the company secretary of ACT Education until last April.

Fellow founder Mr Colledge is sole director of World Academies Ltd which was paid £42,861 and a further £14,904 went to Quality Solicitors, an off-shoot of Chester-based Oliver & Co, whose senior partner is Kay Cook, a governor at the school.

The school’s income at that point consisted of a £220,000 start-up grant and a £40,000 IT capital grant from the Education Funding Agency.

St Martin’s say the payments totalling £118,841 were “for the successful project management and development of the academy and the academy trust in the pre-opening stage, including legal, accountancy and consultancy fees”.

Brendan Wignall, chair of governors at St Martin’s Academy and headmaster of private school Ellesmere College in Shropshire, said: “The accountability of public finances is of paramount importance to us.

“The Project Development Grant was used correctly and appropriately to deliver a great school that is providing an excellent learning environment for its pupils.

“The project management was brought in considerably under budget, using expert knowledge employed directly by the trustees of the school.

“All work to deliver the school on time was bid for through a competitive tendering process, approved by the Department for Education at regular milestone meetings and agreed through tripartite agreements.

“All accounts were also successfully audited at the end of 2013 for the period of July 2012- September 2013.

“The accounts of all academies are open and transparent and it is important to note that all transactions are carried out in full compliance with the Academies Handbook and Company Law.

“We take the responsibility of allocating any funding we receive very seriously and all decisions are scrutinised by the Education Funding Agency as well St Martin’s own governing body.”

Some residents have raised concerns about St Martin’s stated ambition to use surrounding parks for ‘extended play and sports’ and about a new footpath through the park linking an access gate at the rear of the school.

Business people recently demonstrated against a decision to install a new footpath-cycleway on the pavement in Hoole Road in connection with the school.