Des Smith, who has been told he will not face any charges in relation to the cash-for-honours inquiry, is a respected head teacher.
The loans for peerages row is under police investigation
Last April, he was arrested in relation to the police investigation.
According to his local Labour MP Jon Cruddas, Mr Smith does a "fantastic" job at his east London school.
When Mr Smith was appointed head of Catholic boys' comprehensive Bishop Ward School in 1984 it was, in his own words, "depressed and violent".
But in 1992 it merged with nearby girls' Catholic school Sacred Heart to become All Saints Catholic School and Technology College.
And by 2003, it had been named the second most improved school in England, with 89% of pupils achieving grade C or above in five or more GCSEs.
Mr Smith was invited to join the council of the Specialist Schools and Academies Trust (SSAT) - the quango set up in 2005 to seek out donors for the government's controversial city academies programme.
The scheme encourages wealthy individuals to pump money into schools in disadvantaged areas - or even set up their own academies, with a say over what is taught there.
Tony Blair has set a target of 200 academies being under way or opened by 2010.
The SSAT was set up under the auspices of Mr Blair's chief fundraiser and close friend Lord Levy to seek out new academy donors and help them to set up academies.
Downing Street visit
It also acts as "trouble-shooter to help existing sponsors resolve problems", helps academies raise standards and performs a "media and communications role", according to its website.
But the agency, which is part-funded by the Department for Education and Skills, was the subject last year of an undercover Sunday Times investigation amid allegations peerages were being offered in exchange for donations.
A reporter posing as the PR assistant of a potential donor to the SSAT allegedly recorded Mr Smith, who was also acting as a consultant to SSAT chairman Sir Cyril Taylor, making a connection between providing funding and getting an honour.
Mr Smith is understood to have said he had visited Downing Street on several occasions.
And he allegedly told the reporter the "prime minister's office would recommend someone like [the donor] for an OBE, a CBE or a knighthood".
Asked if it was "typical" to get an honour for a donation, he replied: "Yes".
He was then asked if investing in five academies could guarantee a peerage and he told the reporter: "Well, almost certainly. Basically if a Labour government [is] there. What we've got to keep in touch with... is the Conservatives because this guy [David Cameron] he's so good. I mean, you're a PR person, you must like him."
Sir Cyril said at the time Mr Smith's claim was "outrageous". "In no way is giving money to the academy linked to the award of an honour."
Mr Smith later told the Guardian that he had been naive to make his comments.
He said he had been "shattered by the experience. I was naive, I shouldn't have said what I did. I'm desperately sorry".
Downing Street said at the time it was "nonsense to suggest that honours are awarded for giving money to an academy".
He quit his post with the SSAT but was arrested last year under the 1925 Honours (Prevention of Abuses) Act as part of a wider police probe into alleged corruption.
However, the Crown Prosecution Service has announced that Mr Smith will not face charges, as it has "insufficient evidence" .
Mr Smith said he was relieved, adding: "It was a nonsense from the beginning".