A private Muslim school which was threatened with closure has been given a reprieve by the Scottish Executive.
Mr Peacock said progress still needed to be made at the school
Education Minister Peter Peacock said the Imam Muhammad Zakariya school had made enough progress to remain on the independent schools' register.
However, he warned the Dundee girls' school it still needed to improve and said it would be re-assessed by inspectors in December.
The school said it was "delighted" at the minister's decision.
In May, Mr Peacock gave the school three months to act or face closure.
Last year the secondary school, which opened in 2001 and caters for 20 girls, received one of the worst inspectors' reports issued.
The inspectors' report criticised the young and unqualified staff and said the school had not paid sufficient heed to concerns raised in an earlier report about educational leadership, learning and teaching, and the quality of its secular education.
The minister said: "While a number of improvements - notably in relation to the curriculum offered and qualifications of teaching staff - have been made, the progress has been limited.
"This is the start of the process - not the end.
"The school now has an experienced head teacher at the helm and I want these developments to be sustained and built on."
Ministers have also asked to be kept informed of any changes to teaching staff at the school which, as a boarding school, would also have to register with the Care Commission.
The school's Zuber Karim welcomed the education minister's decision and said it was determined to improve further.
He added: "We have embarked on improving the school and I believe we have done quite well."