The Brodetsky primary in Leeds is reviewing all services it receives from the local authority after being charged thousands of pounds above commercial rates for its council-run internet service.
Brodetsky has cancelled its £10,000 annual contract with Leeds Learning Net after a private firm offered a better service for a quarter of the price.
And despite government assurances that schools would not suffer because of its spending review, Brodetsky will also be losing tens of thousands from its annual budget.
Headteacher Jeremy Dunford said Education Leeds had failed to make the internet service competitively priced, although it did offer to drop the charge to £6,000.