Stonehouse Primary School, on School Lane in Leyland, is set to close after pupil numbers dropped to 20.

But the popular nursery tied to the fee-paying school will continue.

The school's headteacher claims the economic climate has helped kill off the school.

Linda Williams told the Lancashire Evening Post that her decision had led to the redundancies of two teachers.

Mrs Williams said: "I have had to make a difficult decision given what's happening in the current climate. The nursery school is full, but the primary school is not. Parents with two or more children are feeling the effects and have taken their children out of school, which is a double whammy for us."

Mrs Williams said she has written to parents with the news, although most children have already found places for next year at other schools
She added: "From the nursery point of view, it's got to be good in some ways as currently it shares facilities with the school.

"We cannot sustain a primary school – it will have a knock-on effect on the other business."

South Ribble Coun Mick Titherington (Labour), who represents Leyland's Golden Hill ward, said: "Its come as a complete surprise. It's always disappointing when a business in the ward closes.

"It's also disappointing when anyone loses their jobs."

Mrs Williams said the nursery caters for up to 90 children a day and has 46 staff. Parents currently pay up to £120 per week for children to be educated at the school, which was founded in 1998.

The recent Ofsted report rated the school as "good" in all areas and as "outstanding" in the area of children's welfare.

Charlotte Barlow, of Walton Park, has an eight-year-old son, Adam, who attends the school.

She said: "We are very sorry the school is closing. Our son certainly had an excellent education and he is very happy at the school. He loves it.

"He has been there since joining the nursery aged two and is sad that the school is closing."

Mrs Barlow said her son has been looking around new schools and is likely to go to another fee-paying institution.

>> Vote in our latest web poll