Ingleby Manor free school received approval from the Department for Education last year - but it needs a purpose-built building, and planning permission for that has been rejected by councillors in Stockton.
You can watch the full report from Rachel Bullock below and see our guide to what free schools are and where else they are planned in the North East here.
More top news
Protestors will head to County Hall on Friday to protest against the proposals for a retail park and 200 houses on the outskirts of Morpeth.
The two cities have been awarded a combined £393,400 to develop technology to help make motoring easier in the region
His Royal Highness rounded off his visit to the region by giving a speech at Virgin Money headquarters in Newcastle.