However, parents in the area are outraged at the mayor's decision and are protesting in Paterson Park, the proposed site of the school.

We cannot understand why the Mayor has chosen to block such a beneficial development

Judith Mayhew, Chairman of The Corporation of London's Policy & Resources Committee

Parents Tony and Tina Penney, whose two children have no school since a locally-run self-help school closed in December, believe Mr Livingstone has made a mistake.

"We need this school to be built, there aren't enough schools in Southwark. I really think Ken Livingstone is out of order," said Tina Penney.

The campaigners expect more than 100 parents along with their children to attend the protest.

'Beneficial development'

The Corporation of London along with Bermondsey MP Simon Hughes have also criticised the decision to block the school.

Parents say there is a shortage of schools

Judith Mayhew, Chairman of The Corporation of London's Policy and Resources Committee said: "We cannot understand why the Mayor has chosen to block such a beneficial development."

Mr Hughes said: "I know how desperately we need a school in this borough and if I have to put my money, reputation and my career on whether I'm for this school going ahead or not, I am unequivocally for it."

The new school intended to specialise in business and enterprise and as sponsor of the school, The Corporation of London has committed �2m to the building costs with the rest of the funding provided by the Department for Education and Skills (DfES).

The establishment of the Academy has been fully supported by Southwark Education Authority, which is providing the site. It had been planned to open the academy in September 2003.