Heep Yunn's decision was made because it suffered a deficit this year. The school said it needed to maintain a healthy balance sheet, but the HK$3,000 annual fee did not cover the costs of operations.

Annual school fees will rise tenfold to HK$30,000 for junior secondary and HK$33,000 for senior forms.

Heep Yunn school principal Clara Lau said it was setting up scholarships for gifted students whose families cannot afford the new fees. 'What we really don't want to see is poor but elite pupils being turned away,' she said.

To attract such pupils, the school will try to set aside 30 per cent of school fees for scholarships. Roughly 54 out of 180 students from each grade will benefit.

'It's well above government's regulation of 10 per cent,' said Dave Lee Chun-hung, who will become principal in September. 'The Education Bureau has no objection to this.'

Fee relief will also be available to students on loose income ceilings, so families earning HK$500,000 or more annually will not be eligible, whereas a pupil from a three-person family earning less than HK$266,000 a year could get a full subsidy.

All details for the subsidy will be published on the school's website for review, in response to the bureau's call for transparency. It also plans to increase the teacher-student ratio to 1:10 to implement small-class teaching. Its ultimate aim was to recruit 100 teachers, Lee said.