SNP ministers are to scrap a multi-million-pound schools programme set up by Labour and backed by entrepreneur Sir Tom Hunter to drive up standards in the comprehensive system.

In a change of policy that takes Scotland further away from the English city academy model, the Scottish Government will continue to fund the 52 schools on the Schools of Ambition programme until 2010, but will then wind up the £15m scheme.

Fiona Hyslop, the Education Secretary, has always opposed the initiative because it provides a benefit to selected schools, rather than the comprehensive system as a whole.

While in opposition she said: "The executive should be bringing forward plans to benefit the educational provision of all schools in Scotland."

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The move provoked an angry backlash from Scottish Labour, which said the project had been one of the most successful educational initiatives ever undertaken in Scotland.

Rhona Brankin, the party's education spokeswoman, was particularly angered because HM Inspectorate of Education (HMIE) yesterday published a report praising the work of one of the country's first schools of ambition - St Ninian's High in Kirkintilloch.

"This is deeply disappointing and bad news for Scotland's education system. Schools of ambition have been an outstanding success in challenging and inspiring pupils at schools across Scotland most in need of transformation," she said. "St Ninian's is just one of the many examples where the programme is making a real difference."

The Schools of Ambition programme, originally intended to involve 100 failing schools, was launched in 2005 by Peter Peacock, education minister in the former Scottish Executive, as a mechanism to drive up standards in the comprehensive system.

At the time, the Labour Party in Westminster was rolling out the model of city academies, which aimed to transform education in schools with poor results by raising up to £2m from private sponsors, who were then given a major say in the curriculum and the academy's general running.

Such a move north of the border would have proved deeply controversial, but the Schools of Ambition programme was seen as an acceptable alternative.

Schools given a poor evaluation report by HMIE were automatically brought on to the scheme, but others which had already begun to transform their performance or were centres of excellence were also selected, to prevent it being seen as a scheme for failing schools.

Each school was guaranteed at least £100,000 annually over three years with the possibility of further funding from philanthropists such as Sir Tom Hunter, or from local businesses.

In return for the funding, the schools had to pledge to improve their levels of attainment, discipline and attendance, and headteachers had to take part in leadership programmes.

Each school had to identify at least one area of the curriculum where it would come to be recognised as having a particular strength, such as sport, music, the performing arts, languages or vocational studies.

The demise of the scheme received a mixed reaction from teaching unions and academics.

David Eaglesham, general secretary of the Scottish Secondary Teachers Association, said: "I am not sad it is going. We need to encourage schools to aim for the highest standard, no matter what area they are in and where they are starting from, and match that with funding."

Eric Wilkinson, professor of education at Glasgow University, said: "There were obviously positives, but overall this project was flawed because it spread resources far too thinly. What we need is a programme which is far more ambitious than this one."

However, Judith Gillespie, policy development manager with the Scottish Parent Teacher Council (SPTC) said: "If this money had been distributed between every school in Scotland, it would have made no impact and this scheme has had an impact."

A spokeswoman for the Scottish Government said: "There are no plans to continue the scheme at present, although the schools that are currently on the programme will continue to be funded. We will ensure that any positive lessons learned can benefit education as a whole."