With its windows boarded up, the long grass in front of the building uncut and the circular rosebeds denuded, Village community school in Derby is a picture of dereliction. Inside the once-grand building, classroom door handles are snapped off, water covers the hall floor and the staffroom stinks of yesteryear’s cigarettes. Scattered exercise books and obscene graffiti seem to indicate that here the struggle for learning and the values it represents has been lost; it is a graphic vision of the end of education.

School closure is never a pretty sight, and this one died slowly, with rumours of its demise contributing to a painful decline for several years before the doors finally closed last summer. “Reducing rolls meant there were no economies of scale,” says Hardyal Dhindsa, lead member for education at Derby city council. “It was dying by 1,000 cuts.” In its final days, the school was inhabited only by the seriously committed - and staff at Village numbered many with a vocation - or those with nowhere else to go.

Parents who could afford to move took their children elsewhere. The profile was “skewed”, says Katherine Eckersley, formerly deputy head, and now leading the new school. “Kids were eating supply teachers. Their school was being taken away from them and they were angry. We couldn’t police it.”

The city council attributed its decision to a surplus of places; some staff had other interpretations. But when one door closes another opens, they say. And out of the demise of Village community school has come the birth and brief life of Village high school. Tucked behind the derelict building, in a warm, newly refurbished Seventies annexe, a group of Year 11 pupils and teachers are having - together - the educational time of their lives.

Staff from Village community school lobbied the education authority to keep open a skeleton school for this vulnerable group for one more academic year, until they had completed their GCSEs. “Staff fought for the Year 11s,” says Katherine Eckersley. “Many of these children weren’t keen on school anyway; we’d lost a lot to the city technology college.” She “dragged” the director of education into the battle-scarred building to show that it was an unsuitable place for the exam year to stay on in. “I said, ‘they already feel worthless. You can’t educate people in this’.”

The city council agreed to invest substantially in the futures of a few score young people, many of whom had received minimal benefit from school. “We had a constructive debate about how to minimise disruption,” says councillor Dhindsa. “We committed whatever was required to ensure the children had the best opportunity to achieve their potential.”

More than pound;100,000 was spent on one of the blocks, to make it fit for use, and 22 staff were kept on - including 12 teachers, five of them part-time. Now, in an experiment that brings to mind the way Chernobyl and its surrounds now apparently flourish as a nature reserve more than 15 years after the world’s worst nuclear accident, out of the traumatic times has come an Indian summer for the enjoyment and benefit of teachers and pupils.

The teachers who decided to stay on - mainly those who had opted for early retirement or redundancy - spent the summer holiday of 2001 recovering from the traumatic end of the old school. “I went away for two weeks and fell asleep by the sea,” says Katherine Eckersley. She spent the rest of the summer checking the progress of the refurbishment, and in September she and her colleagues dusted themselves down, came back and prepared to welcome Year 11.

The council lived up to its promises, despite community scepticism, refurbishing a computer suite, providing a security guard and making good the ruined building in time for the start of the new year. Staff aimed for a “fresh start” note, telling pupils it would be different, that they would be treated as young adults.

The school has 81 Year 11 pupils on roll, 20 of them “invisible”, says Ms Eckersley, although the school is working hard with Derby council to track them down. “Last month we found one missing pupil had moved to Pakistan but, as for the others, we just don’t know where they are.”

The remaining pupils chose the name Village high - inspired by television dramas of lively American schools. The new premises have a lounge area, a television and a music system. Staff agreed there would be no uniform, that they would turn a blind eye to smoking in the extensive, ramshackle grounds and to the use of mobile phones. But they would not tolerate a continuation of the vandalism that had all but wrecked the old school, or the absenteeism, which was rife.

The children who came back have changed. Previously “they behaved foully”, says Ms Eckersley. “Swearing, lobbing things, running away. Humiliating supply teachers.” Now they play tag at break, can be seen skipping, heard humming. “They’re having a childhood,” she says. If one doesn’t turn up, someone gets in the car and goes down to the house to make enquiries. Attendance has improved accordingly. “We’ve got kids in we’ve never seen before, who’ve been on roll for years,” says Ms Eckersley. “Plus, once they get here, they like it.” One school-phobic is now in most days, sticking close to staff and taxied by teacher Steve Jones.

The most striking aspect of the school is the atmosphere of almost palpable happiness. Today, 53 pupils are sitting a modular exam in humanities; staff got 43 of them in early and gave them breakfast, and now five or six teachers prowl around the edge of the hall, delighted by the exemplary way this group are applying themselves to their exam papers. “We work them hard,” says Ms Eckersley. “They’re doing homework, chasing you down the corridor with books for marking - but we’ve got the time now so they’re getting the instant feedback.” One pupil, a Bosnian refugee, stops her to say she had to miss her German mock yesterday to translate at hospital for her mother; can she take the test today?

By accident, students here have got what they needed: a small school, with an experienced, committed group of staff, high staff pupil ratios, stability and a degree of ownership of the institution. The staff, whom Ms Eckersley calls her “golden oldies”, have the unflappable kindness of the best grandparents combined with well-honed teaching skills.

“Our children have special needs and always did have,” says Ms Eckersley. “But with the ratio we have now, we can spend the time with the children helping them and taking into account their individual needs.

“It’s genuine social inclusion. We’ve got phobic children, children in public care, children in trouble with the police, on the at-risk register. Now we have time to support the child who’s crying because his court appearance has been put back and he thinks that because he’ll then be 16 he might go to prison.”

Every student has a mentor and is continually assessed. Every half-term there’s a “parent contact” week. Even though Year 10 was in effect a write-off, staff have high hopes for this cohort’s GCSE prospects. Whatever the exam results, there is little doubt of the benefits of this experience to the students. “We could have had a whole year group here who would have gone through their lives being anti-education, and passing that on to their children,” says Katherine Eckersley. “But there isn’t one child here now who doesn’t see that education can have positives.”

A group of teachers nearing the end of their careers have also been reminded that education can have positives. Sue Dean, 51, is an English teacher with 20 years at Village behind her. “I’m really and truly teaching for the first time in many years,” she says. “We’ve got the time. We’re not the least bit interested in government league tables; we’re here for the children, and they know it; they feel special. We’re never going to turn these kids into Einsteins, but we’re turning out confident human beings with respect for themselves and others.” Steve Jones, with 31 years in teaching behind him, says last autumn was his “best term ever”.

Village high seems a testament to the qualities of the small school. At lunchtime in the staffroom, teachers and students are struggling into satin costumes and wigs for the panto - Cinderella with a Twist, written by Sue Dean. One teacher is on the phone, another eating a sandwich while Charmaine Moss, aka Cinders, hops from foot to foot trying on silver slippers. “You don’t feel shy to do things now,” she says. “The teachers are like friends and you can talk to them and have a laugh with them.”

Dean Monaghan, 15, is the youngest ugly sister and evidently relishes his costume. Excluded more than half a dozen times from the old school, he is flourishing in the new one, he says. “Miss Eckersley said she thought it would turn around for me and I’d do dead well this year. And I am.”

“It’s part of our success,” says Sue Dean, “that we do love them, we do care about them.”

Bob Peel, formerly head of science and with 30 years at Village, joined when it was a girls’ grammar school with 1,700 pupils. “They’re difficult kids but they’re enjoying themselves now,” he says. “I’m thoroughly enjoying it too. We’re pleased that these kids will have good memories to take away.”

Katherine Eckersley, leading the new school, has been at Village for 12 years. Initially second in the science department, she had responsibility for timetabling during the closure period. Why didn’t she find another job? “I was the general organiser,” she says. “My skills were particularly needed. In all conscience, I couldn’t have walked away from those kids. And this year is a complete, unexpected boon.”

Wendy Wallace is education feature writer of the year