A free school has been ordered to close for the first time amid continuing concerns about its standards of education.
Discovery New School in Crawley, West Sussex, which opened just two years ago, has been told it must shut its doors on April 4, the Department for Education announced.
Schools Minister Lord Nash informed the school that its funding agreement was being terminated in a letter to the school's chairman of governors, Chris Cook.
A response posted on Discovery's website said that the school's community was "deeply disappointed that Lord Nash has refused to give us the opportunity to continue as a free school".
The school's closure its likely to be seen as a major blow to the free schools programme, which is a flagship education policy of the Coalition government.
Discovery New School was one of the first 24 free schools to open in 2011.
It was declared failing and placed in special measures by watchdog Ofsted in May.
In his letter to Mr Cook, Lord Nash said he had expressed his "grave concerns" about education standards last month and asked the school for a statement on the action they were taking to address this.
Lord Nash said this statement had been considered, but Education Secretary Michael Gove was "not satisfied that the action the academy trust proposes to take is sufficient in all the circumstances".
As a result, the school was being given written notice that its funding agreement was being terminated and it must close.
A Department for Education spokesman said: "Since the school was placed in special measures by Ofsted in May, we have monitored progress closely.
"The trust has not provided evidence they are making the changes required. Lord Nash has today notified the trust that the department will terminate its funding agreement at the end of the spring term."
Lord Nash's letter said that during a visit to Discovery New School last month, Ofsted found that "no progress in the quality of teaching and learning had been made since the original special measures judgment in May".
It added: " The number and nature of the actions and milestones to be achieved demonstrates that the staff are currently unable to deliver teaching and learning even at the most basic level with the consequence for the pupils of continued inadequate teaching for an unacceptable length of time."
In its statement, the school, which is part of the Montessori movement, said that everyone connected to it had worked "tirelessly" to present an improvement plan to the DfE that it believed would lead to rapid changes.
"Our children, staff and community love this school and we'll be considering our next steps over the coming days," the statement said.
"We'll be seeking to understand - in detail - why our plans have fallen short of Government expectations. And, why we're not being given the gift of time to deliver upon our promises."
The decision means that Discovery's pupils will now have to find a new school place by April.
The DfE insisted it was working with West Sussex County Council to ensure that youngsters had "suitable alternatives" in place.
A statement from the council said: "We will work with parents to ensure that school places are found for pupils in accordance with published admission arrangements and we will accommodate parental preference where possible.
"Although we have had no control over this situation, every effort will now be made to try and minimise disruption to children's education.
"We hope that a meeting for parents can be arranged shortly to discuss options available to them."
Crawley Conservative MP Henry Smith said: "I am deeply disappointed by the Department for Education's decision to close Discovery New School from next April and am disturbed by the failure of management and lack of support.
"As a father myself, I share the great concern which will be felt by parents and have called in Parliament for the Education Secretary to both ensure his officials work with and assist West Sussex County Council to find suitable school places for those children affected, in addition to seeking assurances that the school buildings will be used for education purposes going forward."
Today's move comes just days after inspectors warned that a second free school, Al-Madinah in Derby, is "in chaos" weeks after it was placed in special measures.
The Muslim free school hit the headlines earlier this year after a whistle-blower claimed schoolgirls were made to sit at the back of classrooms and non-Muslim female teachers were pressured to wear head-scarves.
In October, Ofsted inspectors produced a hard-hitting report branding the school "dysfunctional" and placing it into special measures.
A strongly-worded and highly critical follow-up report said that inspectors had found "no signs of improvement in the school". Regarding the quality of leadership and management, it concluded "this school remains in chaos".
Christine Blower, general secretary of the National Union of Teachers (NUT) said: "When a school closes it is the children who suffer and their education that is affected. There will be many worried parents in the run up to Christmas concerned about what this means for their child's education. The blame for the closure of this school lies squarely with Michael Gove and his free school programme which has failed to ensure that schools opened under the policy can provide a decent standard of education.
"Coming on top of the highly critical report on free schools by the National Audit Office (NAO) this week, David Cameron needs to show some bold leadership and announce a pause in the programme. No new free schools should be allowed to open and serious consideration needs to be given to bringing existing free schools under the accountability mechanisms provided for by local authorities."
Shadow education secretary Tristram Hunt said: "In his terrible rush to roll out the free school programme, David Cameron has abandoned high standards and basic safeguards - and the pupils at the Discovery Free School have paid the price. David Cameron is damaging standards by allowing free schools to operate under a complete lack of local oversight, transparency and accountability and by allowing them to hire unqualified teachers."