The building of a controversial new school dubbed the “sardine academy” has come a step closer, after the Government released funding to start developing it.

Schools secretary Ed Balls announced on Monday that he has released “feasibility funding” for Lambeth Council and its partners to start detailed planning of the £45m academy on the site of Fenstanton Primary School in Tulse Hill.

The Government has also approved Edutrust Academies Charitable Trust (Eact) and Dulwich College to be Lambeth’s partners for the 1,100 pupil academy in Christchurch Road, that will specialise in languages.

But plans for a sixth form on the site must still be ironed out with the Young People’s Learning Agency – the new Governmental body responsible for education for 16 to 19-year-olds.

In a letter to Phyliss Dunipace, head of Lambeth’s children and young person’s service, Mr Balls wrote: “I understand there has been significant parental demand for pupils leaving Lambeth primaries to be able to obtain places closer to home.

“I think this project, particularly the partnership between EACT, the council and Dulwich College is exciting, and the co-location with Fenstanton Primary School provides an excellent opportunity for close working to improve educational outcomes of pupils in the borough.”

The school, dubbed the “sardine academy” by its opponents, has been shrouded in controversy since the council’s Labour administration chose its site.

The council intends to knock down the current Fenstanton Primary School and take land from the neighbouring St Martin’s Estate, and replace it with a new primary and a 1,100 pupil academy.

Critics and residents said the council was trying to squeeze too much on to the site, resulting in the loss of valuable green space, traffic problems, and a potential rise in antisocial behaviour in the area.

Lambeth NUT also questioned the choice of Eact, after its predecessor British Edutrust Foundation (BEF), was investigated in 2008 over funding mismanagement allegations.

The council still voted through the plans for the school in December.

A five to six-month statutory consultation will now take place to create a concrete plan for the academy before the Secretary of State releases funding to build it.