SCHOOLS left with crippling debts after falling victim to hidden costs in equipment hire contracts are believed to have struck deals with banks to reduce their liabilities.
It emerged that a number of Waltham Forest schools, which have been handed greater power over their budgets, were left with debts totalling more than £1million after signng contracts with companies for electrical goods, such as printers and laptops.
Some firms then went into liquidation, leaving schools owing large amounts to banks, or large hidden costs emerged.
The Guardian understands the council has now reached agreements with banks to reduce the amount of money schools owe.
Thomas Gamuel Primary School in Colchester Road, Walthamstow, is believed to have been left with seven-figure liabilities after signing a number of leases, incuding a deal for CCTV in 2010.
Clydesdale Bank, which was the bank involved in the contract, has since agreed to cancel the lease.
Edinburgh Primary School in Queens Road, Walthamstow, hired equipment worth up to £60,000, but was left liable for nearly double that amount.
Willow Brook Primary School in Church Road, Leyton, Jenny Hammond Primary School in Worsley Road, Leytonstone, and William Morris School in Folly Lane, Walthamstow, are also believed to have been affected.
Waltham Forest Council lawyers have been negotiating with banks in an attempt to reduce the debts, but banks are understood to be unwilling to cancel the complete liabilities.
The authority and the schools are bound by a confidentiality agreements imposed by the banks which prevent the details of the deals being made public.
Steve White, the borough's National Union of Teachers (NUT) representative, said: "It's fantastic the agreements to cut the debts are happening. The council has bailed them out.
"They couldn't do that for an academy. I worry that some schools could get caught so badly they're forced to close."
The council declined to comment.