AN American company has had exploratory talks with Government officials about the possibility of running ''failing'' British schools for profit, its chairman revealed yesterday.

Mr Benno Schmidt Jr, chairman of The Edison Project, said: ''Officials at the Department for Education and Employment have suggested this might well be legal . . . and that there could be interesting possibilities on this front.''

Edison runs 25 schools in the US on contract to school districts, the American equivalent of local education authorities. It claims high success rates with previously under-achieving pupils, and a commercial return - through using public money more efficiently - of as much as 7%.

Mr Schmidt was scheduled to explain how the company's programme had ''transformed'' state schools in America, at a lecture before the Institute of Economic Affairs, a right-wing think tank, in London, last night.

Official interest in Edison's potential role in British schools has, however, angered teachers' leaders - after a commitment from Education Secretary David Blunkett that firms would not be allowed to make a profit through involvement in Education Action Zones.

Mr Doug McAvoy, general secretary of the National Union of Teachers, said: ''We have a very clear commitment from the Secretary of State for Education that organisations will not be allowed to run schools for profit in this country.''

A Department for Education and Employment spokesman confirmed the discussions with Edison, and said: ''No commitments have been made, but we are always interested in new ideas.''