Schools should be run for a profit, and teachers given shares, says the conservative Policy Exchange.

The report advocates pilot schemes social enterprise schools in some of the most deprived parts of the UK. Schools would be permitted to distribute 50% of any surplus as a dividend to shareholders. The remaining 50% would be required to be reinvested in the school.

Head of education at Policy Exchange, James Groves, said: "Given the huge challenges which our education system faces in the coming years, the government should continue to push the boundaries of the status quo. This report challenges the idea that there is simply a choice between for-profit and not-for profit schools. A John Lewis model of school where private companies, including teachers and school staff are encouraged to personally invest offers one such innovative alternative."