A decision to withdraw Government funding from a free school just a week before it was due to open has been described as an "utter fiasco".
Around 30 pupils were enrolled to start at the One in a Million school in Bradford, West Yorkshire, next week.
But the Department for Education (DfE) announced that the project will not receive funding.
A DfE spokeswoman said they hoped the charity-run One in a Million school would still be able to open next year.
Ralph Berry, Bradford Council's executive member for children and young people's services, called for an investigation.
"Who made these decisions, how and why? We're not being told. There has to be some further investigation into how this was done," he said. "It's an utter fiasco."
Councillor Berry said the council was now having to find school places for the children.
He said: "I found out that, despite the parents having bought the uniforms and the kids meeting their teachers, the Department for Education were pulling the plug and pulling their funding.
"And we're having to pick up the pieces."
He added: "The parents are very upset. Who's going to reimburse these parents?"
Free schools are established by groups including parents, teachers, faith groups and charities and have powers to decide how they spend their budgets and set their own curriculum, teaching hours and term times.
This project was a collaboration between the One in a Million charity, Bradford City Football Club and the DfE, with the school based at Bradford City's Valley Parade ground.
Cllr Berry said those involved did not know why funding had been withdrawn and believed they had met all their targets.
He said the school, which would eventually provide places for around 350 children, was supposed to enrol 50 pupils this year but only around 30 had signed up to start in September.
A DfE spokeswoman said: "Setting up a free school is a difficult task and we thank One in a Million for all their hard work.
"Before any new schools open their doors, we have to be sure that all the conditions we set have been met.
"Making certain that new schools raise standards is one of the reasons why our Free Schools have been so popular with families across England.
"We still hope that One in a Million will open in 2013.
"We understand that the parents and children hoping to attend One in a Million will be disappointed.
"We have assurances from Bradford local authority that every child will have a school place this September."