Northland Māori principals say they are amazed Education Minister Hekia Parata has chosen to prop up a charter school that they say has been a failure from the start.
The charter school's new chair says most of its problems have now been fixed.
The trust running Te Pumanawa o Te Wairua removed its management team in March, including founding director Natasha Sadler, after it was given 28 days' notice by the ministry to lift its performance or face closure.
Ms Sadler had previously defended the school's progress, saying it was taking on the hardest-to-help pupils: those who had been failed by the state system and some who had dropped out of education entirely.
The school's roll, which started at 71 students, now stands at 39.
Education Minister Hekia Parata said today that she was allowing the school to stay open out of concern for its students.
She said the Government would give the school an extra $129,000 this year to help with its improvement plan, adding that the school would be audited again in October.
The school already receives $1.5 million per year as part of its contract.
Critics have questioned local support for the school, its isolated location, a lack of iwi involvement and the abilities of those running it.
The Post Primary Teachers' Association (PPTA) said, within months of the school's opening 18 months ago, pupils were returning to schools in Whangarei - tired of the hour-long bus trip there and back, and put off by the disorganised schooling they were receiving.
The chair of Northland Māori principals' association Aka Tokerau, Robert Clarke, said his colleagues were surprised that the minister had decided to keep the school open.
He said it had failed repeatedly to meet performance targets yet was being rewarded with extra funding.
"For a school that was put in our face as being a credible alternative, and another choice for parents to make, then to have these last-chance-saloon type of deals is very disappointing," he said.
"I'm sitting here with my Aka Tokerau colleagues; we all went, 'wow, what does this school have to do to ever be closed?'"
Tai Tokerau Principals Association president Pat Newman said the Whangaruru school was a failed experiment, and throwing more cash at it was not the answer.
Mr Newman said the money would be better spent on at-risk children in public schools, which have proved they can perform.
"We are screaming out for resourcing for special education. We are told there is no more money," he said.
"We are screaming for help in all sorts of areas, like behavioural problems, and all the rest, and we are told there is no more money. Yet the minister has been able to find more and more money for a school that has failed on every count."
A new board and a commisssioner have been installed at the school since the audit in March.
Dee-Ann Brown, the new chair of the trust that owns Te Pumanawa o Te Wairua, took up her position three weeks ago and has been on the board since 1 May.
Ms Brown said she was motivated to do her best for the school's students and most of the problems identified at the school had been fixed.
"You know, the kaupapa is centred around the students of the school and that's what drives me, really - to ensure that these 39 students, several of whom have been disengaged in education, receive an alternative form of education."