Government officials were today seeking a new sponsor for Bradford's planned City Academy after electronic retail giant Dixons turned down an invitation to be main private funder.

The group, which funds Dixons City Technology College, had indicated it was likely to provide about £1 million for the academy which would be one of the first in Britain.

The independent academy - which would be the result of a merger between the CTC and Bradford Cathedral Community College - would be run as a company with charitable status governed by a board of stake-holders expected to include sponsors, members of the community, parents and the district's education authority.

The first City Academy is in Haringey, London, and Bradford LEA, Education Bradford, Bradford Diocese, the Cathedral College and CTC have submitted their official expression of interest in being one of 17 across Britain to follow it.

Most of the cash for the Academy, which would cost £15 million to £18 million, would be provided by the Government. But the sponsors - expected to have been Dixons and the Diocese of Bradford - would be expected to contribute 20 per cent.

Today Sir James Hill, chairman of the CTC board of governors, said funding to the CTC was not affected and Dixons had been invited by the Department for Education and Science to sponsor the project in a private capacity.

"This leaves it with no industrial sponsor but we are in discussions with the Cathedral Community College and Education Bradford and remain committed to it," he said.

The Reverend Howard Astin, chairman of governors at Cathedral College, said he wanted the project to go ahead and he could not comment on Dixons' decision.

A Dixons' spokesman said the company had put millions of pounds into education in the Bradford district including its contribution to the CTC which would continue.

He said Dixons had also given hundreds of thousands of pounds to Bradford South Education Action Zone and its contribution to the district was far greater than any local company.

He named the Beacon status given to the CTC, sports college status awarded to Tong secondary and technology status for Grange secondary as achievements Dixons was proud to be associated with and said the company had committed funding to the city until 2007.

"We wish the proposed City Academy every success and we are confident it will find funding if it has the potential the project team see in it."

Councillor David Ward, Bradford Council's executive member for education, said he was concerned by Dixons decision but still believed they would be able to go ahead.

A spokesman for the DfES said: "We are looking for another sponsor and in talks with a potential sponsor we cannot name. It is early days."

The schools - which each have 1,000 pupils aged between 11 and 19 - would probably operate on a split site with sixth formers having their own campus.

There are plans to demolish the Cathedral College buildings and rebuild a £15 million building with a performing arts centre which would open from September 2005.