WORK to build a new special education school at Newsome has stopped.
Contractor Totty has downed tools and left the Newsome Road South site.
Work started at the end of June - but over the past two weeks all machinery and portable buildings have been removed from the site.
The move was made in agreement with Kirklees Council.
A council spokeswoman said the stoppage was the result of a delay in the signing of a contract between the council and building firm Jarvis.
Newsome Special School, plus three other special schools in Kirklees, are to be built under a £25m Private Finance Initiative scheme, which involves a private company investing in public services.
But Jarvis has not yet signed a formal contract for the PFI.
The delay is being linked to Jarvis's widely publicised cash problems .
No new work will start at the Newsome school until Kirklees Council, the Government's Department for Education and Skills, Jarvis and its bankers have finished talks.
The council spokeswoman said: "The signing of the contract and construction work is expected to be delayed by the current position.
"However, the council is committed to finding a way through the situation and pursuing a solution that will provide much-needed new schools and modern facilities.
"These will greatly improve the school lives of children with learning difficulties and physical disabilities."
The Newsome school was due to be finished by June next year, so children could move in by September.
It would cater for 108 children aged three to 19.
It would replace Turnshaws at Kirkburton and Highfields at Edgerton, which will close in July next year.
As well as the special schools PFI, Jarvis is also involved in a £50m PFI for 20 mainstream schools in Kirklees.
The company has completed refurbishments to 15 of the schools and work is almost done at four of the remaining schools.
Jarvis also provides support services for these schools, including cleaning, caretaking and maintenance.
The Kirklees spokeswoman said these schools would not be affected by Jarvis's cash situation.