AET has claimed Sandown Bay Academy is unviable and controversial plans to merge it with Ryde Academy will be better for students.
Academies Enterprise Trust said it had met with Isle of Wight Councillors today (Thursday) to discuss the merger plans, which have prompted a backlash from parents, staff, students and politicians.
AET said over the last five years the school had halved in size and income, leading to overspending and years of deficits that were not sustainable. & ;lt;br> The trust said its financial reserves were almost exhausted, standing at just over £100,000, due to a drop in income.
It said the income, which is tied to pupil numbers, had plummeted from £12 million in 2012/13 to £7 million this year and that the problem of reduced pupil enrolments was Island-wide.
In its statement, the trust said: "Staff cuts and restructuring, although seen as only the last resort, have been unavoidable.
"In spite of the reductions made to date, we have not managed to halve costs. So three of the last five years have seen deficits ranging from £200,000 to £400,00 per annum. Over the five years, £3.8 million of annualised savings have been achieved, but these are still significantly less that the £5 million drop in income."
The statement added: "Looking forward, even if we saved yet another £1.6 million over the next two years, which would have to include £1.2 million in staff costs and yet another round of potential job cuts of around 25 staff, we would still be in deficit in three years time and unviable."
A formal consultation on the proposals will be launched before half-term.