The UK's only Jewish residential school for special needs children is to close by the end of term unless it can find £500,000 within two weeks.

The loss of Manchester's Delamere Forest School, which has been running for 90 years, will see no dedicated Jewish secondary school provision for children with special needs outside London, and no residential schooling of its kind anywhere. It also means 17 pupils, who are due to continue schooling there in September, are uncertain about their future.

This week the school's governors said they were beginning mandatory consultations on redundancies for over 20 staff with a view to closing the school by the end of this summer's term.

Delamere put its large Cheshire premises up for sale last year due to declining numbers. A strategic plan moved it to a newly-built Jewish wing at the Inscape House specialist school for autism in Salford. Delamere also opened a replacement residential facility in nearby Crumpsall. The revamp had already attracted pupils from north Manchester's Jewish community, and cut costs by sharing management with the Inscape school, whose charitable trust initially paid for the redevelopment.

But the school has run into financial trouble after a buyer withdrew from an expected £1.3 million deal on its Cheshire premises because of planning setbacks. The property has now been valued at just £600,000, less than half the expected amount and not enough to repay loans and secure the school's financial future.

‘It will be a nightmare for parents without Delamere’

Malcolm Joels, chair of Delamere's governors, said he was "frightened" that the school's trustees would be taking "unseemly gambles" to continue the school unless a further £500,000 could be raised to secure its future.

"It was our inability to get funding that led us to realise that we could not take a gamble and then find ourselves closing the school halfway through next year. It's horrendous for parents already - and even worse if we were to close inside an academic year and put parents in a terrible situation. We have taken the decision on ethical and moral grounds."

The closure means families like the Englanders, who won an appeal against Salford Council to send their autistic son Yechezkel to Delamere just three months ago, have been thrown into disarray.

Lindsay Simmonds, from Edgware in London, whose son Yosef has been at the school for three years, said the closure was a "nightmare" for parents who would not know where to turn.

"Yosef could not manage in mainstream school. There was no option other than Delamere for us. As a child, having residential care was incomparable, and he is from an Orthodox Jewish home, and we were relieved he could go to a school and have Shabbat, chagim and tefillah.

"Even in London, where there are other Jewish special needs schools, parents find it very difficult to find places for their children, near impossible actually," she added.

Inscape House has offered to continue day schooling for Delamere pupils next year, which will include Jewish studies and kosher food, but without residential facilities.