Schools across the Bradford district are battling to claw back millions of pounds from mobile phone deals sold to them by a telecoms firm which was forced to call in the administrator.

In total, 90 of Link Telecom’s creditors – including primary and secondary schools across Bradford and other parts of West Yorkshire – are owed huge sums of cash after signing up to contracts promising free use of mobile phones..

Under the terms of Link Telecom’s £3.9m Safer Schools Campaign some schools were given up to 300 phones.

Schools make monthly contract payments to network provider O2 and in turn should have the money re-imbursed by Link Telecom from the commission it received from O2.

Initially, Link Telecom, of Saltaire, was paying money back to those schools which had signed up to three-year contracts since 2005.

But earlier this year it began to suffer cash flow problems causing some payments to be missed. In October the firm was forced to call in administrators Begbies Traynor.

This means schools are still paying out, but receiving no cash in return. Bradford schools are understood to be owed a total of £3 million.

The company has blamed its financial difficulties on O2 which it alleged had “moved the goal posts” leaving it receiving “significantly less” commission.

Link Telecom’s bank also called in the company’s overdraft after finding out about its financial situation, the firm stated.

Its managing director, Gary Fawcett, told the Telegraph & Argus that he was working with the schools but said that, unless the situation with O2 was resolved, it was likely to “take a while” for schools to receive their payments.

He said: “It is our intention, if O2 play ball, that the schools will get their money back.”

An O2 spokesman said: “We are aware that Link Telecom is experiencing financial difficulties which is affecting our customers. We are looking into this as a matter of urgency.”

O2 refused to comment further to the T&A.

Councillor Ralph Berry, Bradford Council’s Labour group education spokesman, described the situation as “shocking” and called for tighter checks and balances on which companies schools sign individual deals with.

Coun Berry said: “This seems to be a classic case of things not being as good as they look. This could be very damaging to schools.

“The local authority must look very closely at the business credibility of any organisation that we are looking to use as a partner in procurement. I would like to know what steps were taken to assess the viability of this company.”

Liberal Democrat group education spokesman, Councillor David Ward, who is a governor of Carlton Bolling school which is owed money by Link Telecom, said the company had left schools like his in a difficult position by going into administration.

Councillor Michael Kelly, the Council’s executive member for schools, was not available for comment last night.

The schools are now understood to be working together to get money from Link Telecom. Bradford Council refused to tell the T&A how much money its schools were owed in total.

An Education Bradford spokesman said: “We are aware that there are problems and are working with the schools and the Council on this matter.”

Link Telecom said it now had new financial backing from Bowland (NW) LLP, a venture capital business.

Under the reorganisation, Link Telecom has kept its trading name, having placed its Link Telecom Holdings and Voice Connections businesses into administration.

It is now operating as ETC Communications Ltd, after bringing its southern operating arm, based in Camberley, Surrey, within the group.

None of the 60 employees at the Saltaire headquarters have lost their jobs.

A spokesman for Link Telecom said: “Link Telecom faced a period of uncertainty and increasing financial pressures when its bankers demanded significant reductions in its lending facilities and one of its network partners moved the goal posts on a deal that could result in the withdrawal of several million pounds of commission.”