Governing bodies are to be given powers to set up companies and run services for other schools - powers that could be used to re-establish community services such as post offices in isolated areas.

The surprise proposal was contained in last week’s Education Bill, alongside widely expected clauses on reforming the size and functions of governing bodies and allowing groups of schools to federate under a single board.

The Bill would allow governors to set up, invest in, or take over limited companies providing services or facilities to schools, including education authority functions.

The Secretary of State would have powers to fund people providing educational services, or using “educational buildings or facilities for purposes other than those of education”.

The move has been given a cautious welcome by the Local Government Association, which represents councils, in so far as it would enable schools in rural areas to help provide other services for isolated communities - for example, banking, post office, health and social care.

Schools on inner city estates deserted by other private and public sector service providers could also undertake such roles, said Neil Fletcher, the association’s head of education.

But he added: “One of the worries would be if this led to governors taking their eye off the ball. The standards agenda has got to remain their prime goal.”

Those concerns were echoed by Jane Phillips, chairwoman of the National Association of Governors and Managers, who said governors were already overloaded.

“What we don’t want are further diversionary issues to take us away from the main task of assisting schools in providing the best education for all pupils.

“They must be in cloud-cuckoo land if they think governing bodies want to take over local education authority services.”

But there was more support from Chris Gale, chairwoman of the National Governors’ Council, who sees big benefits in other services - particularly social workers - being school-based.

“It’s a fact of life that school buildings are under-used. Governors do have concerns about security but if it suits the school, it could be a good thing,” she said.

David Hart, general secretary of the National Association of Head Teachers, said some schools were already offering services to others, and that such arrangements needed formalising.

Regulations are likely to stipulate that school companies must be limited by guarantee - which would help protect governing bodies from debtors if a company folded. And there may be restrictions on their borrowing powers.

Company proposals would need local authority approval, but could only be turned down in limited circumstances. LEAs could take charge of companies set up by groups of schools.

There has been no prior consultation on the company proposals - unlike other sections of the Bill. These include measures allowing governors to provide community services, such as childcare, and reforms of governing body size and composition, consulted on in the Department for Education and Skills’ Way Forward document.

Governors’ key task will remain “conducting the school with a view to promoting high standards of educational achievement”. They might also get more say on how local education budgets are distributed, because LEAs will be required to set up school forums.

Other powers included in the Bill would allow schools to be exempted from legal requirements in respect of, for example, the curriculum and teachers’ pay and conditions. The aim is to free up schools to innovate - but the final say on exemptions would lie with the Secretary of State.