Campion School could be demolished to make way for hundreds of new houses on greenfield land if proposals by a developer reach fruition.
An unknown developer has offered to rebuild the school as part of a development of new homes on farmland between Sydenham and Whitnash.
The site is one of five 'potential strategic housing development' sites around Leamington, Warwick and Kenilwor
th put forward by landowners and developers. These have been suggested since Warwick District Council began consultation on its plans for where new homes demanded by the Government should be built.
But although the school apparently welcomes the possibility of a new site, Whitnash mayor Cllr Brian Smart said the news of the development came as a "bombshell".
The site is an extension of an area already earmarked for 200 houses by 2016. Close to the Brook Valley nature reserve and the site of a Holy Well.
Cllr Smart warned that building on the "huge" area might create problems with flooding and also affect the wildlife habitats.
He said: "It's something we hadn't expected because it's an area of restraint as well as an area of historic interest. We want to maintain the gap between Whitnash, Leamington and Radford Semele but housing is slowly creeping forward."
Questioning why the suggestion had been made after initial consultation on housing in the area, Cllr Smart also cast doubt on whether roads could cope and enough houses could be built to pay for a school.
Cllr Smart added: "Whitnash seems to be bearing the brunt of development in recent years, but the infrastructure doesn't seem to be enough to cope with major developments."
Cllr Bob Crowther (Lab, Leamington Clarendon) is Campion School's chairman of governors. He said the school was "showing its age" and governors were "very interested" in the prospect of a complete rebuild.
Although he stressed that Campion should not lose its connection with Sydenham and south Leamington, he also said new housing was a potential source of pupils.
Cllr Crowther added that he was aware there may be local opposition to building on greenfield sites, but said that seeing new houses as the price of paying for a school was a "negative" way of looking at the issue.
He said: "It isn't that development is a prerequisite for building schools, but it is a normal part of the process for contributing to education provision."
A Warwickshire County Council spokesman said he could not identify the developer for reasons of commercial confidentiality He said: "We are aware that the developer has promoted this scheme to the Warwick District Council planning department, so the onus is on the developer to make this scheme work. If anything does materialise, the county council will consider it with great interest, as it would for any site."
Members of Whitnash Town Council will be meeting planning officers this week and will discuss the proposal in public on Thursday.
A six-week public consultation will begin on Friday February 26.