SWANMEAD Community School at Ilminster is in the midst of a cash crisis.
The News can reveal that the school is looking at staffing, management and curriculum structures to deal with a large budget deficit.
School governors and Somerset County Council have been looking at the situation - in a bid to resolve the problem and produce plan for the future.
It is thought that a fall in anticipated pupil numbers and the rise of inflation have all contributed to the school's difficulties.
A spokesperson from Somerset County Council's education department said: "The school has been in discussion with the Local Authority about their difficult financial situation which they are currently managing.
"The finance team are currently supporting the school in producing a financial recovery plan effective over the next couple of years to ensure that their future budget situation is balanced and sustainable."
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