This is a tale of two cities. In the City of London it is the best of times. Share prices are up, trading is up, profits are booming and London is back on top of the league of international capital markets. Five hundred yards down the road, it is not the best of times. The London borough of Tower Hamlets is officially the UK’s most deprived borough. There is much poverty and unemployment; housing is often poor and overcrowded, many people are in bad health and schools are near the bottom of the league tables.

But the city of London and the East End share more than a council boundary. A remarkable partnership between Tower Hamlets schools and City financiers is building bridges between the vastly different worlds of the dealing room and the classroom.

Closing the Gap - a scheme launched by Tower Hamlets to reduce the differences between itself and the rest of London by involving businesses, public sector bodies and community groups in education - has been a remarkable success. Since 1994 local schools have received more than Pounds 5 million from sponsors including the Stock Exchange, Credit Suisse First Boston Bank, Lehman Brothers, Lloyds of London and the Goldsmiths’ Livery Company. The tidal wave of exchanges between public and private sponsors, voluntary groups and schools in the East End has prompted the creation of a full-time education business partnership to deal with it.

Nor is it just a question of money. Dealers have abandoned their trading floors to spend weekends devising maths games for 14-year-olds, high-flying legal brains are spending their lunch hours reading stories to 8-year-olds, technology wizards are switching from multi-million pound systems to installing software in a classroom Amstrad and top consultants are giving free management advice to headteachers.

But what makes a city whizzkid forego business lunches to teach inner-city children to read?

For David Bilbe, senior vice-president with US-owned State Street Bank, it is part of his personal and corporate philosophy. “It’s the duty and responsibility of businesses to be involved in their community. In Germany and the Far East, there’s a much closer involvement between the two. Apart from anything else, it makes sense to have an informed workforce. These kids are our future just as much as those at Eton.”

David spends three or four hours a month acting as mentor to a group of six 15-years-olds from Langdon Park school in Poplar.

“I get them to think about interviews, what to put in a CV and so on. But what I am really there for is to make them believe in themselves - to believe that they can get jobs in the City, in this bank, for instance.”

Working with children from disadvantaged backgrounds is a “levelling experience - you can’t help but be affected by it emotionally. You work in a nice office, you go home to a nice house in Surrey. It’s easy to put your hands in your pocket, but giving time and commitment is what’s really needed. These kids are as bright as hell. All they lack is someone to take an interest in them.”

Education took Julia Lindsay from an Essex comprehensive to a plush Barbican flat and a top executive’s post at the Bankers Trust, another American bank. “I have been very grateful for the chances that education gave me and I believe that others should have those opportunities too,” she says.

Julia devotes part of her working week to organising the bank’s partnership with Morpeth school in Bethnal Green - a pioneering alliance which has helped create an after-school study centre, organised revision and study weekends, bought new instruments for the school orchestra, paid for study trips to Paris and New York, and established work placements and work shadowing schemes. Thirty 14 to 18-year-olds went on the trip to New York, courtesy of Bankers Trust which has a similar relationship between Manhattan staff and a New York high school.

“It’s not just a question of writing a big fat cheque,” says Julia. “This has involved commitment from staff at all levels.” Teachers from the school and staff from the bank meet regularly to plan the partnership’s work. Julia is impressed by the calibre of some of the teachers at Morpeth. “They’re intelligent, they have vision and they know where they want to go. I aspire to be as good at my job as they are in theirs,” she says. “After seeing what people are doing at Morpeth, I now tell friends and colleagues not to talk glibly about state education.”

Rex Hall is the Tower Hamlets partnership strategy manager. “What’s remarkable is how people from such vastly different backgrounds have been able to get on together,” he says. “People in the City might see inner city schools as Fort Apache. But when they come here and see things for themselves, they go away transformed.”

Not so long ago the City’s image of its neighbour as a den of knife-wielding, glue-sniffing, car-stealing layabouts would have been matched by the East End view of the Square Mile as a haven for champagne-guzzling, Porsche-driving layabouts. But the education partnership is helping to demolish these caricatures as fast as 1960s office blocks.

“It may be only one stop on the Tube, but it is a different world,” says Morpeth headteacher Alasdair Macdonald. “Some of our staff were a bit suspicious of the bank’s motives when we first started. There was a feeling among some that they just wanted to influence young people. But most of them have been won over. On the New York trip, people from the bank, teachers and the kids got on like a house on fire.”

It’s not just altruism that has prompted City firms to become involved in inner city education. Senior executives admit that staff development and establishing a corporate spirit are important factors too. There’s also a public relations payoff in adopting schools on their way up the league tables.

The US influence in the banking world has also been critical in making the partnership work in Tower Hamlets - Bankers Trust and State Street have long traditions of community involvement.

“In Los Angeles 1,000 companies are partnering schools,” says Rex Hall. “Here we’re lucky if it’s 10, but the climate is changing and many financial institutions are at the forefront of that change. But because they are not rooted in a community - nobody lives in the City - we have been able to offer them a community.”

If success can be measured by exam results, then Closing the Gap is paying off. A-level and GCSE results are the best in years and reading tests show that Tower Hamlets is one of the most improved education authorities in London.

Gillian Fletcher of the City law firm, Clifford Chance, is delighted to be playing a part in raising reading standards. Once a week she swaps her desk in the chairman’s office for a seat in a classroom at Shapla School, Wapping, helping two nine-year-old girls with their reading. “For me it’s the high point of the week. I love reading and it’s lovely to share that with children who want to learn.”

Now she has convinced 60 of her fellow lawyers to volunteer as reading helpers at Shapla. Can it be long before the school uniform is a pinstripe suit?