The Academy is only the second in Argyll and Bute to be accepted for the Executive scheme, and news of the award comes on the back of two and a half years of steady improvement following a critical report by education inspectors in September 2004.

The school's bid to become part of the project focused on three key themes - highest quality learning and teaching and a focus on personal best; supporting pupils' development through enhancing links with the wider community; and building excellence in music and sport.

News of the bid was officially confirmed during a visit to the school on Friday by the island's MSP, deputy finance minister George Lyon.

Reacting to the announcement, the Academy's head teacher, Ken Moncrieff, said: "We are all very pleased. This is very good news indeed and supports us in building further on our significant achievements over the past two years.

"In addition we are looking forward to moving into our new high quality school buildings and benefiting from the facilities provided by the council. The future looks very bright for our young people in Bute."

Among the detailed plans are for a youth worker to act as a 'bridge' between the school and the local business community, and for master classes in music and sport, held on the island with leading coaches and tutors.

The money will also be used to improve the prospects of those children who could end up in the 'NEET' group of young people after leaving school - NEET, for those not in the know, stands for 'not in employment, education or training' - while also pursuing excellence in a number of fields.

Mr Lyon said: "This is an exciting time for education on Bute - this award and the new school building are a fantastic opportunity for future and current pupils.

"I want to pay tribute to Mr Moncrieff and to all the staff and pupils who have worked so hard to make such a big step forward in the school.

"This is a bright new future for all the children on Bute, and I will continue to offer the school my full support in the coming years."