THE WINNER of an £83m contract to rejuvenate education in north Swindon is to be announced next month.

Seven firms submitted bids to build new schools under the Government's controversial Private Finance Initiative scheme.

The bids have now been whittled down to two, and the winner should be made public at the end of next month so the bulldozers can move in and start building new schools during the summer.

Swindon Council claims the scheme for seven new schools will be a turning point in the authority's quest to drive up standards in the classroom.

But critics of PFI whereby private firms build schools and hospitals which are mortgaged to local authorities over 25 years received a significant boost this week.

Jarvis, the PFI specialist, announced its third profit warning in four months.

And speculation is rife that the firm, which has been criticised for its performance on contracts, is the developer behind one of the two final bids for the Swindon schools.

The company recently came under fire for its handling of a £55m contract to build nine schools in Merseyside.

Delays meant that some schools were unable to open on time but the firm claims that the delays were due to asbestos on the site and says that the majority of its PFI work has resulted in improvements in education and headteachers were delighted. Jarvis would not comment on whether the firm was involved in the bid.

Teaching unions fear similar problems could dog the Swindon scheme.

Their concerns were stoked by an Audit Commission report last year which found some schools built with private cash were not up to standard.

Phil Baker, secretary of the Swindon branch of the Association of Teachers and Lecturers, said: "The Audit Commission looked at the first 60 PFI projects, and was very critical of them.

"The Government claims to have learned lessons since then, but the unions do not believe it.

"I just hope the council will ensure we get a good deal for the people of Swindon, or else it will be us, the council tax payers, who will have to pay for the mistakes."

The council will not disclose which firms are involved in the bids.

The scheme will see Hreod Parkway Secondary School replaced with a 32-acre state-of-the-art learning campus.

It also includes plans for another secondary school, three primaries and a special school.

And Moredon Infant and Junior Schools are expected to be amalgamated and rebuilt north of Akers Way.

Pupils will move into the new schools between 2006 and 2007.

Coun Gary Perkins (Con, Shaw and Nine Elms), the council's lead member for education, said that PFI represented the best way forward for the town.

He said: "I can understand the concerns, but without PFI these schools would not get built.

"We have got to make it a success for Swindon, and create schools fit for the 21st century."