Campaigners believe more homes being built will bring more pupils
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The head of a primary school in Cornwall, which is to close for good in August, said the community is devastated by the decision.
Villagers had fought a long-running campaign to keep Lanreath Church of England school open.
But Dr Peter Matthews, an independent adjudicator appointed by the Secretary of State, has decided the school is not educationally viable.
Jill Watts said the community did all it could to save the school.
"I take my hat off to this community," she said.
"They have really done us proud, the community couldn't have done any more to support us."
'Difficult situation'
In his decision Dr Matthews said he "sees the interests of the Lanreath pupils as best being served if as many as possible transfer to the same school as a group with their friends and would recommend this course of action to parents".
The decision to close the school in the village near Looe came after concerns from the county council about falling pupil numbers.
It was predicted last year the numbers were set to fall to just 12 in September 2008.
Over the past year, parents and governors have fought a campaign to keep it open and felt they had a good case against it being closed, with more affordable homes being built in the village.
'Life and fabric'
Hundreds of villagers went to London last year to protest about the proposal.
Dr Matthews said he recognised how much the school was part of the "life and fabric of the village" but it remained likely "that the educational viability and value for money of the school" would continue to be issues.
Terry Lello, from the county council, said: "This has been a very difficult situation for everyone connected with Lanreath School.
"The local authority has never disputed the quality of education currently provided for children at Lanreath but feels it would not be possible to meet the needs of children between the ages of 4 and 11 in one classroom."