THE trail revealing the inner workings of the £300m city academy scheme began in November at Mosimann’s, the private Belgravia dining club in central London.

A reporter posing as Claire, a PR assistant to a wealthy financial entrepreneur, had contacted the office of Sir Cyril Taylor, head of the city academy trust, saying her boss was interested in making a donation. She was swiftly invited to a talk and a dinner for sponsors taking place later that week.

In a room upstairs at Mosimann’s, Taylor held court after a seminar at his offices in Millbank. He placed Claire next to Des Smith, a headmaster and council member of Specialist Schools and Academies Trust, which helps recruit wealthy sponsors to back academies.

Champagne was served before a three-course dinner and a lively discussion about the poor quality of state teachers, class sizes and design of schools.

Smith was keen to know more about the mystery potential donor Claire represented, and after the dinner he invited her to go to a champagne bar at Liverpool Street. He knew the staff well, he said, because he “did lots of business there”.

They drank more champagne and chatted, and Smith boasted he had been to “No 10 lots of times”. He even offered to introduce Claire to Ruth Kelly, the education secretary.

In mid-December Claire and another reporter, posing as the mystery donor, took Taylor to lunch at L’Oranger, another smart restaurant in St James’s Street, off Pall Mall.

Over a bottle of Pouilly Fumé, Taylor explained how the government’s plans for specialist schools were booming as hundreds of millions of pounds were poured into Blair’s pet projects.

Behind his explanation lay the reality that, although the academies are trumpeted as innovative partnerships of the public and private sector, most of their money comes from government. But it is important, for Blair’s political aims, to ensure that sufficient private donors are also secured.

Taylor presented this as a fabulous deal because a donor could get the credit while putting up a relatively modest sum as the government actually supplied the bulk of the money.

“You’ll never have a greater opportunity to have £2m, to attract another £20m plus capital and then permanent funding forever,” he said. “The only reason the government is prepared to do that, especially a Labour government, is because these schools are so awful.”

Taylor made it clear he had influence right at the top. He said he had been an adviser to numerous secretaries of state, he regularly met Kelly and he had a “link” to Downing Street.

Although he denied donors could expect to be decorated, he said he had been awarded not one but two knighthoods: first a Knight Bachelor then a Knight of the Grand Cross. “I have duties,” he said. “I occasionally have to accompany the Queen on things.”

Taylor suggested that the next step for “Malcolm”, the potential donor, was to find out more about city academies — and the man to help him was Smith, the champagne-drinking headmaster. Smith would make a good “project director”, said Taylor, “a professional, who knows all the buzzwords, (and who) can deal with officials”.

Smith took Claire to a restaurant below the Nicole Farhi boutique in Bond Street where they chatted over wine and food. Smith appeared keen to secure “Malcolm” as a donor and talked about how they could co- operate on projects.

The reality of how deals can be done for sponsoring academies finally emerged last Friday when Claire again met Smith in the champagne bar inside the Great Eastern hotel at Liverpool Street.

They had a few glasses of wine and then he took her to the Fishmarket restaurant inside the hotel. They chatted for a while about how Smith, who picked up the bill, was hoping to do some consultancy work at a rate of £600 a day.

Then Claire raised the subject of honours, observing that lots of people involved with academies “seem to get some kind of honour or recognition for . . .”

“Yes,” said Smith.

“Why’s that?” asked Claire.

“Because basically . . . the prime minister’s office would recommend someone like Malcolm for an OBE, a CBE or a knighthood,” Smith said. He went on to explain how donors could be put forward for honours and how, if they gave enough money, even get a peerage.

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