TEACHERS' leaders have called for controversial school building contracts to be scrapped to protect education spending.

The demand from the Educational Institute of Scotland (EIS) teaching union comes after it emerged that more than 200 schools built in Scotland under private finance initiative (PFI) schemes are now at least partially owned by offshore investment funds.

Under PFI, the private sector builds and manages school buildings in return for a fee, typically over 25-30 years. In one project in Edinburgh, 17 new schools were built, with the council paying £1.5 million a month.

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Analysis found there had been 13 trades involving equity in the Edinburgh schools scheme since 2001.

Larry Flanagan, general secretary of the EIS, called for PFI contracts to be renegotiated or bought out to protect education spending in the classroom.

He said: "The fact offshore investment funds have bought stakes in PFI-funded schools serves to highlight the significant profits that are being generated as a result of these types of school building and maintenance contracts.

"Fund managers generally invest in projects primarily with the aim of generating a healthy return for investors, so it is clear that they see PFI-funded schools as a strong source of potential profit.

"The EIS has long argued that the long-term cost and value of these models are highly questionable. At a time of austerity driven pressure, the Scottish Government and local authorities must take a very close look at all PFI school projects and ensure the public purse is not being exploited.

Dexter Whitfield, from the European Services Strategy Unit, told a BBC Scotland investigation the Edinburgh PPP scheme was now owned by four different companies.

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"Those four different companies are located offshore in Guernsey and Jersey, and they are basically controlled by shareholders," he said.

A critic of PFI, he has described the projects as "wealth machines", adding: "There are an awful lot of people making very substantial sums of money out of it."

The 17 schools built in Edinburgh under PPP were closed for repairs earlier this year after construction faults were found.

The problems - with wall and header ties, used to hold exterior and interior walls together and attach them to the rest of the building - first became apparent when part of a wall at Oxgangs Primary fell during stormy weather.

About 7,600 primary and secondary school children in the capital were eventually affected.

An independent inquiry into the matter will consider whether the private finance method contributed to the structural issues with the buildings.

The City of Edinburgh Council said the schools would be safe and well-maintained for as long as the contract is in place.

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Andrew Kerr, the council's chief executive, said the terms of the contract ensured that schools are kept in a good condition.

He said: "That's something that was decided 10, 15 years ago. Our job is to make sure we manage that contract going forward as well as it can be."

There are 93 PFI projects in Scotland - responsible for hundreds of schools, road, hospitals and energy projects - and worth more than £6bn.

BBC Scotland Investigates: How Safe is My School? is on BBC One Scotland at 19:00 on Monday 22 August.