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Nearly 1,000 British language instructors were left fearing for their jobs yesterday after Nova, the scandal-ridden owner of Japan’s biggest chain of language schools, closed its doors and filed for court protection from creditors with debts totaling an estimated 43.9bn yen (£1.88m).The firm, which has about 900 schools and 418,000 students, built its success on the back of advertising campaigns promising opportunities for “international exchange” at schools near railway stations staffed by native-speaker instructors. But its troubles began earlier this year when Japan’s supreme court ruled that it had acted illegally by refusing to refund students who had cancelled their contracts.

In June the trade and economy ministry ordered Nova to close some of its schools after ruling that it had misled students in advertising campaigns.

The negative publicity led to a dramatic decline in enrolments and left the school unable to pay thousands of its teachers, some of whom also face eviction because Nova failed to pay their rent, which is deducted from their salaries. Nova’s 2,000 Japanese staff have not been paid since July and about 4,000 foreign instructors have not been paid since September. Christopher Gunn, one of around 900 British Nova teachers caught up in the crisis, has had to borrow from friends to pay his 55,000 yen monthly rent and has only 3,000 yen left in his bank account.

“Until this morning no one knew what was happening,” he told NHK television. “I’m angry and a little upset but not surprised at all. I may have to borrow money for a plane ticket home.”

One British employee, who works as a trainer, told the Guardian she and her boyfriend, who will not be paid until next month in a new job, were living off the last of their savings and help from their parents. “Rent and bills are getting difficult to pay,” she said. Another British couple she knows are facing eviction, she added.

The Osaka district court will try to find sponsors to rebuild Nova’s business. Trading in Nova shares was suspended on the Jasdaq securities exchange in Tokyo, with the shares to be delisted next month.

The General Union, which represents many Nova employees, said the school’s troubles had reached crisis point. “This is a serious development that could force many students, instructors and employees to suffer losses,” the union’s chairman, Katsuji Yamahara, said.

The British embassy in Tokyo has set up an advice page on its website. It is putting British teachers in touch with a travel agency that has agreed to provide cheap flights to the UK. “We are doing everything we can in terms of consular support and advice but the one thing we can’t do is provide direct financial assistance,” a spokesman told the Guardian.

Nova president, Nozomi Sahashi, was fired at an emergency board meeting on Thursday for his “opaque way of fundraising and negotiating with potential business partners,” the company said.

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Nothing was going to plan for the trainer who had been brought in to show the college’s lecturers how to handle classroom observations. The equipment wasn’t working. There were not enough handouts. Some of the staff turned up late.Had the trainer herself been under observation - by Ofsted, say - she would probably have been rated “unsatisfactory”. However, she got her message across effectively, and everyone went away happy.

This technically weak but otherwise successful session illustrates the difficulties colleges face as they try to devise a “firm but fair” formula for conducting classroom observations. Ofsted’s requirement that colleges observe and rate lecturers’ teaching is part of a push towards more self-assessment, with the promise of “lighter touch” inspections for institutions that prove they can keep their house in order.

But union leaders have denounced “draconian” measures that they say have been brought in by some colleges to weed out anyone who fails to deliver on his or her day in the spotlight. Practices causing the most concern include observations carried out at short notice or without warning; rapid re-observations with little support for staff whose performance is found wanting; and re-observations for lecturers whose teaching is rated “satisfactory”.

Some staff are considering industrial action. At Southgate College, London, where members of the University and College Union (UCU) are being balloted on a possible strike, a union official says: “This has very little to do with improving teaching, and everything to do with trying to catch lecturers out. We are not against classroom observations, we just want them to be conducted in a way that is supportive rather than punitive.”

Southgate says its lecturers are given two weeks’ notice of a three-day window for observations, and “early and effective” support if they need to improve. The system had been agreed with union officials. Issues only arose when it was put to the union membership, a spokesman said.

Newcastle-under-Lyme College is the scene of a long-running dispute over observations. Lecturers given an “unsatisfactory” grading are re-observed within a month, then put through a “marginal and unsatisfactory performance procedure” if they are still not up to scratch.

UCU regional official Teresa Corr says this approach is typical of many colleges. “There is no question that in this round of inspections, all colleges are trying to appear tough and resolute in a bid to get a lighter touch and be allowed to be self-regulating. It … will rumble on until something drastic happens, like someone cracking and a serious assault taking place.” At one college the issue has already led to an assault by a lecturer on an observer, Corr claims.

The UCU wants to negotiate guidelines with the Association of Colleges (AoC). But the association is reluctant to do anything that might restrict colleges’ freedom.

College heads are pinning hopes for improvement on a peer review system being piloted this year. But even this must be tightly controlled, warns Maggie Scott, the AoC’s director of learning and quality. “It’s no good unless colleges are prepared to be rigorous. That is the issue - whether professionals will be tough enough on each other where there are weaknesses,” says Scott, who is co-chairing a working group on college self-assessment.

No problem, as long as lecturers are trusted, says Philip Naylor, UCU branch secretary at the College of North East London, which recently resolved a dispute by overhauling an unpopular observations system. “Our management has recognised that if they encourage people and trust them to get on with it, then things will work out.”

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Durham University today announced it has suspended the former dean of its business school for plagiarism.Prof Tony Antoniou resigned as dean in September, following allegations that he plagiarised material for an article in 1988, but was still in his post as a professor of finance.

The action comes amid rising concern about plagiarism among academics under pressure to “publish or perish”. Plagiarism among students is increasingly policed by lecturers using online programmes such as Turnitin, but there is little knowledge of how prevalent bad practice is among academic staff themselves.

In a statement, the university said it had completed its investigation by a panel of three professors independent of the business school and the allegation of plagiarism was upheld. One of the professors was a subject specialist from another university.

“The university takes plagiarism extremely seriously. The matter is now being taken forward under the university’s formal disciplinary procedure,” added the Durham statement. “Prof Antoniou has been suspended from duty with immediate effect by the vice-chancellor pending the outcome of this disciplinary process.”

The university pointed out that the investigation related to a time before Prof Antoniou joined Durham and there were no allegations relating to his work at the university.

A separate allegation relating to his doctoral thesis at the University of York is still under investigation.

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Thousands of foreign teachers including 900 from Britain face redundancy, financial misery and eviction from their homes after the collapse of Nova, Japan’s largest chain of English language schools.

Diplomatic sources at the British and Australian embassies in Tokyo told The Times that they were expecting a “significant exodus” of teachers, as unpaid staff struggle to find new jobs and buckle under Japan’s hefty cost of living.

More than 900 British teachers, a similar number from Australia and arbout 1,300 from the US - some of whom have families and have settled in Japan - have been plunged into legal limbo, their careers hanging by a thread.

For many Nova teachers, the lack of salary could leave them homeless within a few days because their rent is usually paid to landlords directly by Nova.

One British teacher, who rents his own apartment, said that he was expecting a sudden flood of colleagues to be sleeping on his floor as they struggled to find new jobs in a market with only limited opportunities.

The airline Qantas, in agreement with the Australian Government, has begun offering cut-rate, one-way tickets back to Sydney for Australians stranded by the Nova bankruptcy.

Many English-language teachers are preparing for what could be drawn-out and expensive legal battles. Teachers in remote, rural parts of Japan, often young university graduates living abroad for the first time, have found themselves stranded as their savings run out.

Today all 1,000 branches of Nova - Japan’s largest language school chain, with 50 per cent of the market - remained closed after the company filed for court protection from its creditors.

“I feel betrayed,” said Richard Naish, a 25-year old teacher from Bath, whose Nova branch is in remote Tochigi prefecture. “The managers and teachers have all resigned around me and for the last few weeks I’ve had no boss at all.”

Mr Naish arrived for work yesterday to find a Japanese staff member in tears, removing her belongings and bolting the front door of the school - perhaps for good.

Nobody has yet been told whether Nova, and the jobs of its 5,000 employees, will survive into the new year. Nozomu Sahashi, the company’s founder, who was sacked by his board yesterday, has disappeared from public view. The company said that it was looking for other companies to mount a rescue bid.

Nearly 450,000 students expecting to be taught as usual were met with locked classroom doors this morning; about 2,500 teachers from Britain, Australia, Canada and the United States were told that lessons would be suspended indefinitely.

The ubiquitous chain, which is known as the “McDonald’s of language schools” and is famous for recruiting aggressively at British university campuses, has not paid teachers for six weeks. Japanese support staff and administrators working for Nova have not received pay cheques since August.

Across Nova’s network of schools, hastily written pledges from Nova’s head office in Osaka have, on successive pay-days, offered false hope to the teachers that they would be paid the next day.

The company is crippled with debts of almost 50 billion yen (£210 million), and has been losing students as its image has crumbled.

“There has been a sense that Nova would go under for a few months, but we were just kidding ourselves for ages that it was too big to fail,” said Joe Berry, a teacher from Yorkshire who has worked for Nova for two years.

“But now we know this is it, and people are going to struggle. Some of these teachers have families, mortgages - it is such a shame it’s come to this.”

Nova’s problems stem from an ill-conceived expansion of its branch network across Japan, backed by a massive advertising campaign. The company was unable to find enough experienced teachers to staff its classrooms, and many students defected to rival schools after complaining about the poor quality of Nova’s language courses.

Nova’s plight deepened in June, when it received a six-month ban on enrolling new students after regulators ruled that Nova had lied in its advertisements. The company is also notorious for its treatment of teachers and Japanese staff and has been accused of violating labour laws.

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Within six years most sixthformers could be leaving state schools, not with GCSEs and A-levels, but with a new qualification, a continental-style school diploma, in the biggest exams shake-up for a generation.

Last week the schools secretary, Ed Balls, announced a government U-turn that some believe could signal the death of A-levels as free-standing qualifications and their replacement by the new diplomas, even for the brightest pupils. Flanked by Sir Mike Tomlinson, who drew up the original diploma proposals – only to see them largely vetoed in 2004 by the then prime minister, Tony Blair – Balls said, “I believe that the diplomas could emerge as the jewel of our education system.” He added, “They could become the qualification of choice for young people.”

Teenagers will be free to choose either GCSEs and A-levels or the new diplomas up until 2013, when a review of the entire exam system has been promised by the government. Until last week many viewed the diplomas, in subjects such as hair and beauty and construction, as a job-related, practical route for less-able children and an attempt to persuade disaffected 16-year-olds to stay on at school. But on Tuesday Balls announced three new diplomas – clearly aimed at highflying academic pupils – in sciences, languages and humanities. These will be on stream by 2011.

Last week Tomlinson told The Sunday Times that top universities are already indicating that, after some tweaking, the engineering diploma, one of the first to come on stream next autumn, will be a “better” preparation for an engineering degree than maths and science A-levels.

Tomlinson also revealed that he was asked again by the government to work on developing the diplomas after Gordon Brown became prime minister. “There is a different mood” in government, he said. After 2013 it was possible that the A-level qualification would no longer exist. “I do not know how schools and parents will respond but if the majority of pupils are doing the diploma because it is better . . . the exam boards may decide not to offer A-levels” if there are not enough pupils taking them to make it worthwhile financially.

The former chief inspector of schools said he did not know why the government’s U-turn had occurred. “You’d have to ask Ed Balls that,” he observed. “My own take on it is that there has been increasing pressure from various groups arguing that what is happening was not as good as it should be. Firstly, there is an increasing divide being created between voca-tional and academic courses in schools. Secondly, A-levels and GCSEs are no longer delivering young people with the skills and knowledge needed by universities or employers.”

Tomlinson added that there was a lot of criticism of A-level standards. A quarter of all A-level grades last summer were As, making it difficult for top universities to identify the brightest children. In maths and sciences some universities are having to provide remedial classes for 18-year-olds. The newest diplomas announced, he emphasised, would include the content of A-level syllabuses, but with extra “more rigorous” material developed partly by professors. It would be easier for universities to select the most-able children using the diploma system, which might include a points score, similar to that used by the International Baccalaureate (IB).

“Instead of having three or four A-levels you would have a diploma . . .high-flyers could have a high overall point score,” he said.

The task now will be to persuade parents, pupils, universities and schools to take a chance and opt for the new qualifications rather than for GCSE and A-level courses. So far the diplomas are being offered to only 40,000 pupils in 900 schools out of a secondary school population of 600,000. They will embark on one of the first five in construction, media, IT, health and engineering, from next September. In all, 17 diplomas will be offered, at three levels: foundation, intermediate (equivalent to six GCSEs) and advanced (equivalent to three A-levels).

However, unless take-up rises massively, the diplomas will not emerge as a serious rival to the A-level in the free-for-all ministers have now sanctioned. Indeed, earlier this year Alan Johnson, Balls’s predecessor as education secretary, warned the diplomas “could go horribly wrong”, becoming a second-class qualification. There was a “huge challenge” in making sure people understood what they were, Johnson said.

“Government now has an important job in terms of communication,” agreed Tomlinson. “Parents want to be reassured that the course their son or daughter is following will not lead them to a dead end. But if my son were now saying he wanted to do the engineering diploma next autumn I would say “fine” because I know that most universities, including Cambridge, are saying they will accept that diploma as an entry qualification to their engineering degree.”

He added that ministers should hold off making new policy initiatives so that teachers could have time to get to grips with the new diplomas and also called for better careers guidance in schools.

Graham Able, the master of Dul-wich college, was one top headmaster who warned last week that if A-levels were scrapped in 2013 fee-paying schools would not offer the government diplomas but opt for different and separate qualifications, such as the new Cambridge PreU currently under development. “If A-levels disappeared in favour of the proposed diploma at some future stage, it is likely that we would switch entirely to the Cambridge PreU,” he said.

Tomlinson himself, a governor at Merchant Taylors’ school in Middle-sex, revealed that the school is investigating introducing the IB. He admitted that there was the possibility of confusion by 2013 “if they do not get these diplomas right and they do not get them accepted by universities”.

But he added that they could indeed become the most popular qualification for most teenagers “if all the problems are ironed out. After all they are the qualification of choice for most of the Continent”.

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