The parents are claiming Balls and the council broke EU procurement laws by approving the development and sponsorship of an academy without fair competition.
Camden council is accused of ignoring proposals from parties interested in running the new school and Balls is accused of approving University College London (UCL) to sponsor the academy “behind closed doors”.
The claimants have been granted a substantial hearing to take the case forward, but Leigh Day & Co., the law firm dealing with the case, said a conclusion would not be reached for several months.
Rosa Curling, solicitor for the parents, said: "If public bodies are letting contracts, they should do it in a transparent way and everybody should be allowed to know what is going on."
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