The £72m school

The image shows how Holland Park School in Kensington, known as the "Eton of comprehensives", will look if a £72.6 million scheme to rebuild it is approved by town planners.

The renovated school is due to open its doors in 2013, but the project is highly contentious because Kensington and Chelsea council insists the only way to make it financially viable is to sell part of the grounds for development into expensive flats.

Now a plan to include some "affordable" housing for council tenants and key workers has been scrapped.

The Conservative-run council says this is the only way it can make enough money from the sell-off to pay for the project, as its estimated cost has risen from £60 million.

This is the second time the council has submitted plans for the site. The first application was withdrawn in November after a campaign by residents and Sport England, who protested that the school would lose most of its asphalt playing surface.

Under the revised plans, more outdoor spaces, including a floodlit games area and an extra tennis court, will be retained.

But many local residents are still opposed, as the plan still involves the school losing the northern section of its playgrounds. They also suspect the eventual cost could hit £100 million because of the effect the London Olympics will have on the construction market, pushing up demand for builders and materials, which will in turn boost prices.

David White, chairman of Campden Hill Residents' Association said: "We are disappointed beyond belief. Nothing has changed. One third of the school site is still being sold off for private housing, to pay for years of neglect of the school.

"There is desperate cramming in of hard-surface play space into the shrinking site. All that has happened is costs have spiralled again, more planning fees will be voted through this week, and not one new classroom to show for it after four years and over £5.7 million."

The new eco-friendly buildings will include a sports hall, a swimming pool, badminton and basketball courts, a gym and dance studios. The number of classrooms will fall from 94 to 75. A council spokesman said the new classrooms would be "slightly larger" and would use space "more efficiently".

A central feature of the design is an atrium that provides better visibility for teachers, enabling them to monitor pupils more closely as they move around the building. London Mayor Ken Livingstone requires residential developments to include 50 per cent "affordable" housing.

The council plans to get around that by building affordable units on two other sites, in Ifield Road and opposite Latimer Road station.

Council leader Merrick Cockell said: "To make the financial figures stack up and maximise outdoor play space we have decided to move the affordable housing off the site.

"We are looking forward to building a fantastic new school, and in the process providing up to 83 units of affordable housing."