Council chiefs are being urged to write-off the budget deficit at a secondary school so it can form a multi-academy trust.
Councillors are being recommended to support Wellfield and Tanfield schools in their aspirations to form the trust.
A multi-academy trust is a group of schools working in collaboration as one. It is governed through a single set of directors who would assume responsibility for the schools from the local authority.
Bosses say the move is being considered for the two secondary schools as part of Durham County Council’s commitment to ensuring sustainable education is provided in communities.
Next Wednesday’s meeting of the council’s Cabinet will be told how, partly as a result of government funding for education not keeping up with inflation, some schools are having to set deficit budgets.
Councillors will be reminded that, had funding kept pace with inflation since the financial year 2009-10, there would be an extra 15% - £46 million - available for schools in County Durham.
Both Wellfield, at Wingate, and Tanfield, at Stanley, have historical budget deficits.
A report to the meeting outlines how it is unlikely that the schools will be in a position where they can clear their deficits without an impact on the quality of education.
Members are being recommended to agree to the council writing off the deficits of both schools to allow them to form the trust. The costs of this would be met from within a dedicated reserve.
The creation of the trust is subject to the approval of the Regional Schools Commissioner.
Coun Olwyn Gunn, Cabinet member for children and young people’s services, said: “We have examined all options available.
"Because of government funding guidance and academy trust legislation, we find that the multi-academy trust is the only way forward to build on the improvements already delivered at Wellfield and at the same time work for Tanfield School.”
Coun Alan Napier, Cabinet member for finance, said: “It is important that schools operate with a balanced budget.
"The proposal for these schools to become part of a multi-academy trust will mean that we have to meet the accrued deficit balances from our reserves.
"However given the work undertaken to review educational provision in the area, we are aware that this is the only option that provides sustainable education for young people within an ever tightening financial envelope for our schools.”