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Work on one of Tony Blair's city academies has been suspended after it costs went over budget.

The £20m St Paul's Academy in Greenwich, south-east London, designed by architect Jestico + Whiles and sponsored by the Roman Catholic Diocese of Southwark, is due to open a new facility for 1200 children in September 2007, but that date is now in doubt.

Canon Martin Lee at the diocese told ºÚ¶´ÉçÇø that the project was on hold while the sponsors and consortium pondered their next move.

He said: "The procurement route we were following has not produced the result we needed in the time expected so we are reviewing our options. But we don't expect to be talking about this for months on end."

EC Harris, Davis Langdon, Interior Services Group, Roger Preston, Buro Happold and landscape architect J&L Gibbons are working on the project.

One source working on the scheme confirmed that the project was over budget and was currently being investigated. The source said: "There is a problem. It's a two-stage tender process and it's come in over budget. We're trying to unravel what's happened."

The delay is all the more serious because the academy has already opened in existing buildings under the accelerated programme being run by the DfES, which is trying to keep its pledge to open 200 academies by 2010.

The procurement route we were following has not produced the results we needed in the time expected

Canon Martin Lee, RC Diocese of Southwark

St Paul's Catholic School was rebranded St Paul's Academy last September, a year before pupils were expected to move into new facilities.

One consultant working on academies said this was part of a trend and that the government was moving the goalposts to try to hit its 2010 target.

The source said: "What we're seeing happening on the academies is they are being opened in the existing buildings before the new or refurbished facility is either built or most definitely completed. It's seen as a way of using the headline statistics to suggest that we'll reach the target by 2010, when we'll actually still be building them.

St Paul’s conversion: Opening day is in doubt

"For the government it's one way of hitting the target. It's a sneaky way of doing it. The whole principle is to give kids a good modern educational environment. I take my hat off to academies that are prepared to open in very poor buildings and then be judged on how well the kids have done academically," the source added.

The opening of sponsor ARK's Westminster New School, in central London, has also been delayed for a year, until September 2007. When it opens, it will operate in its existing premises until these are refurbished.

This method suggests we’ll reach the target by 2010, when we’ll actually still be building them

Source close to the programme

The delays come after problems at Unity Academy in Middlesbrough, which has failed two Ofsted inspections. One of the criticisms made was that building work dragged on after it was open.

However, a source close to ARK said the "transformational educational experience was more important than the building".

A spokesperson for the DfES told ºÚ¶´ÉçÇø that it had always intended to refurbish a significant proportion of the academies.

The delay comes after the government turned its back on signature architects and launched contractor frameworks to speed up the £5bn programme. The move has raised hopes of delivering academies more efficiently, but also fears that one of the key appeals of academies - their design quality - will be eroded.

Educational specialist Alligan, which was also working on the St Paul's Academy, finished its contract with the Academy Trust on 1 September, and has since been working four days a month to support the scheme.

Jestico + Whiles declined to comment.