A school which lost a £100,000 legal battle to gag Ofsted from publishing an ‘inadequate’ inspection report has been named.

Lady Lumley’s School, in Pickering, North Yorkshire, was graded ‘inadequate’ by the school watchdog during an inspection in October last year.

The local authority-maintained school said it fought the judgement as it wrongly portrayed pupils as “endemically” racist and homophobic.

I could not see any justification for spending over £100,000 of public money to challenge Ofsted in the High Court

Lady Lumley’s was granted an anonymity order in January to prevent publication of the report while it fought for an interim injunction. However, last month it lost a High Court appeal for the injunction and the report was published on Tuesday.

The report said pupils were concerned about regular use of racist and homophobic language around the school that “is not always challenged” by staff.

Greg White, the North Yorkshire County councillor for Pickering, said he “could not see any justification” for spending “over £100,000 of public money to challenge Ofsted… That money was provided to fund children’s education.”

He has asked the council to investigate how “such expenditure had been authorised, to use their powers to prohibit any further spending on fighting the report’s publication and to consider replacing the governing body with an interim executive board”.

Parents were told in a letter on Monday, from chair of governors Stephen Croft and headteacher Richard Bramley, that the legal challenge cash was “already in the school budget and the school still remains in a sound financial position”.

The letter read: “We are deeply upset by this report and the process which produced it… We know our pupils are not endemically racist or homophobic and we know our staff would not tolerate such behaviour”.

However, on the back of the ‘inadequate’ grade the local-authority maintained school will now be forced to become an academy and join a trust.

The secondary school was rated as ‘good’ in 2016, and the school argued that dropping to ‘inadequate’ in three years “cannot be justified on any rational basis”.

The report highlights positive aspects, for example rating the quality of education as ‘good’

But inspectors said a “large minority of pupils do not feel safe in school. They do not feel protected from bullying. They do not believe that there is an adult they could talk to if they were worried about anything.

“They are fearful of, and are fed up with, the behaviour of a small group of pupils… They are not confident that leaders will sort any of this out.”

The school has since commissioned a review of safeguarding and dedicated more staff time to pastoral support.

Croft and Bramley also lamented the lack of an “independent ombudsman or equivalent” when dealing with complaints against the inspectorate.

Under a new complaint system proposed by Ofsted earlier this year, it will withhold publication of inspection reports until it has resolved these complaints.

However in the current system, schools have to submit formal complaints within 10 days of an issue of concern, but Ofsted does not normally withhold publication of reports while it considers complaints.

An Ofsted spokesperson said: “The school leaders disputed our findings. Ofsted was successful in the High Court and in the Court of Appeal, and legal proceedings are now concluded. We are pleased we are now finally able to publish the report, which speaks for itself.”