Funding for an academy has been put on hold by ministers following threats of legal action from protesters against the new school.

The Government has postponed signing off the funding agreement for Furness Academy, Barrow-in-Furness, while a separate legal battle is waged over a planned school in London.

Campaigners against the proposed academy in Camden, north London, claim that the way school sponsors are selected breaks European competition and procurement laws. They want all local authorities to be forced to hold open competitions instead of doing deals behind “closed doors”.

Their case was turned down by the High Court earlier this year, but an appeal against the decision has been lodged and is due to be heard.

Anti-academy protesters in Barrow-in-Furness, Cumbria, have threatened ministers with an injunction if they agree to fund the Furness Academy before the appeal is heard.

Ed Balls, the Schools Secretary, has agreed to the delay in funding, which had been expected earlier this month.

In a break with normal practice, he has also said he will give 10 days’ notice of his intention to sign if a decision is reached. Without a funding agreement in place the school cannot open.

The episode is the latest in a series of problems afflicting the academies programme in Cumbria. The chief executive and principal of the Richard Rose Central Academy in Carlisle were forced out of their jobs in January after the school was put into special measures. And earlier this month, the principal and another senior member of staff were suspended from West Lakes Academy in Egremont over allegations that they harassed and bullied staff.

The proposed Furness Academy, due to open in September, will merge the existing Thorncliffe, Alfred Barrow and Parkview schools on two sites.

But the plans have been the subject of sustained local opposition, which has generated a 6,000 strong petition. A number of independent candidates opposed to the academy will stand in the local council elections next Thursday.

Roger Titcombe, of the campaign group Our Schools Are Not For Sale, said he hoped that election success for anti-academy candidates could further delay the programme. “We want the existing schools to open in September as normal. The academy plan is in utter disarray,” he said.

Pupils at Parkview School are planning to stage a protest against the academy on Monday.