Victoria Dock Primary, which opens its doors for its new pupils on Thursday, has been the first school built under the "private finance initiative", which enables local authorities to use private sector funds for public building projects.

The school in Kingston upon Hull, built by a private company, the Sewell Group, will be hired back to the local authority for the next 25 years.

The school, built as part of the renewal of derelict docklands, will open with places for 60 primary pupils and a 26-place nursery, but the design anticipates expansion, with a site capacity for extra classrooms for 240 pupils.

The new headteacher, Sue Roach, says that the ground-breaking arrangement with private business is a "real partnership in every sense of the word and it will grow into a wider partnership. It's a very exciting venture and we know our children will feel special".

The private finance initiative is intended to help local authorities to develop large-scale public services without having to raise the money themselves.