Few things are more dangerous in politics than policies that top the prime minister’s “must do” list. The word goes out around Whitehall that the policy must succeed at all costs. Ministers are told in no uncertain terms that they must deliver. Failure is not an option. So it is with city academies, the £5 billion school reform that has come to symbolise Tony Blair’s third-term domestic agenda. He believes that these partly privately funded state schools will be the standard bearers not only of educational excellence, but also of the “parent power” needed to drive that forward. Mr Blair has pledged to create 200 such schools by 2010 and, even if he is gone from office by then, to have enough in place for that target to be secure.

On the face of it city academies, schools built on the site of failing comprehensives in disadvantaged areas, are a good idea. They offer head teachers the kind of autonomy the prime minister wants to introduce for all schools, providing Ruth Kelly, his hapless education secretary, can push the reform bill through the House of Commons. The record of the 27 academies already established is mixed and the educational establishment hates them — normally a sign that they are a good thing — but they deserve a fair wind.

The key to the success of the academies, according to the government, is the involvement of businesses and other organisations which provide part of the funding. The result of this involvement is that academies “bring a distinctive approach to school leadership drawing on the skills of sponsors and other supporters”. For the sponsors, who are normally required to put £2m towards the £25m capital cost of an academy, such backing can bring dividends. It is a low-cost way to getting on the good side of the government and securing local and national publicity.

That, it seems, is not enough. The Specialist Schools and Academies Trust (SSAT), chaired by Sir Cyril Taylor, describes itself as “the lead advisory body on the specialist schools and academies initiatives . . . providing advice and support for schools seeking to achieve or maintain specialist school status and to sponsors wishing to establish academies”.

Lord Levy, the prime minister’s chief fundraiser, who has been successful in getting businessmen to cough up for new Labour, is its president. Since 1997 the link between donating to Labour and getting an honour has been a bit too close for comfort. Two big Labour donors, Lords Sainsbury and Drayson, are ministers in the House of Lords. Plenty of others may also owe their knighthoods and peerages to the size of their chequebook. Now it seems the same is true for those who provide sponsorship for Mr Blair’s academies. When reporters from The Sunday Times posed as potential business sponsors of academies, they were directed to Des Smith, a member of the SSAT’s council. They were told that a benefactor who sponsored one or two academies could expect a knighthood, while somebody stumping up the money for five would be “a certainty” for a peerage for “services to education”. Mr Smith was confirming what has already been happening. Six of the sponsors of the existing academies have already been honoured. More can expect gongs in the coming years. Perhaps we have become inured to this government’s abuse of the honours system.

This newspaper led the way two years ago in revealing the political machinations behind the system. Honours in return for political donations have become part of the furniture under new Labour. Even so, this latest cash-for-honours scandal breaks new and disturbing ground. If Mr Blair’s city academies programme is to succeed, it should do so on its own merits. If it can be made to work only through grubby patronage, it should be abandoned. The prime minister, as always, will insist he knows nothing of this. If he does not, he should — and should act accordingly.