The academy trust in charge of Swinford and South Kilworth primary schools has announced a halt to the restructuring of the two schools to allow a review of the options.
The restructuring, which would have seen the two village schools brought under one executive head, sparked protests from pupils and parents at Swinford.
The protests came after the headteacher at Swinford Primary School Edy O'Connor faced being made redundant under DLAT's proposals.
Last week all six non-executive directors quit DLAT's board in response to the row.
Today, Wednesday, the new Board of Directors for the Diocese of Leicester Academies Trust (DLAT) announced it has decided to halt the restructuring process while a full review is undertaken.
Stephen Adshead, chair of the new trust board said: “We are acutely aware of the progress that our schools have made over the last 18 months.
"There is some fantastic work happening across our schools, and previous directors, supported by the CEO, made some very pragmatic and principled decisions that had the best interests of our schools and trust at their heart.
“There are, however, some significant challenges in relation to finances and funding which have come to a head in relation to the proposed leadership restructure at Swinford and South Kilworth primary schools.
“As I am sure people can appreciate, it is right that we conduct our own due diligence on some of the decisions that have been made so that we can fully review the options available to us. As a result, we have made the decision to halt the restructuring process.
“We do so acknowledging the fact that our first review of the finances clearly suggests that changes are going to have to be made, and we are not ruling out any options for the future.
"While it is important that we work diligently, this is not a process that we feel should be rushed. We need to be assured that any decisions are made on sound educational and financial foundations, which have been explored and discussed with key stakeholders.
“We have already engaged with the local governing bodies of the two schools to discuss next steps, and look forward to working with them and the wider community over the coming weeks and months.”