An oversubscribed Oxford school is planning to use controversial new powers to expand that could force the education authority to hand over up to £1m.

Matthew Arnold School headteacher Adrian Percival

Matthew Arnold School in Cumnor is among only a handful of schools nationally to use the Government legislation, allowing "popular and successful schools" to expand to meet parental demand outside their catchment areas.

If successful, the Year Seven intake for September 2006 would increase from 174 to 202 and the school would secure a £500,000 Government grant.

Existing buildings would be refurbished and a new teaching block with up to eight classrooms, along with an additional science laboratory and art room, would be created.

Oxfordshire County Council would have to pay the balance of the programme, expected to cost between £1m and £2m.

Neighbouring schools, worried that Matthew Arnold will poach their pupils and divert cash from more needy building projects, have criticised the move.

Since Adrian Percival took over as headteacher at Matthew Arnold six years ago, results have improved dramatically and it has become an increasingly popular choice for parents. Mr Percival, who is leaving the 980-pupil school at the end of the summer term to take up a Government post on a new national school improvement initiative, said he was optimistic the expansion bid would succeed, giving parents more choice while having a "modest impact" on other schools.

He said: "This is a real opportunity for Matthew Arnold School to satisfy the increased demand for places while at the same time creating significant new and refurbished accommodation for pupils in the school.

"The council is not exactly supporting it, but is providing advice on the process. Given the spread of areas that we draw from, the impact on any individual school is going to be quite small."

Schools in Oxford, Abingdon, Eynsham and Faringdon are being consulted over the next four months before the Oxfordshire School Organisation Committee (SOC) makes its decision.

Government guidance advises the SOC to have a strong presumption in favour of such a proposal.

Michael Waine, the council's member for schools improvement, praised Matthew Arnold's "vision and ambition", but warned the bid needed careful consideration.

He said: "This bid would have to be considered alongside the needs of other schools that may already be waiting for council funding in a planned programme. Otherwise there is a potential for inadvertent leap-frogging, which would be in no-one's interests."