What is the justification for private schools to be given free-school status, thus saving the parents thousands a year in fees?

When it was announced last year that Batley Grammar school, a private school near Leeds, was to become a free school – meaning parents would no longer have to pay fees of up to nearly £9,000 – some were understandably delighted. One excited parent told Channel 4 news that it was "like winning the lottery".

Batley Grammar, an elegant Victorian building with many original features and a slightly shabby feel about it, is one of five independent schools out of the total of 24 that opened as free schools last month.

Others are keen to follow suit. According to the Department for Education, 40 of the 281 proposals in the second wave of applications were from private schools. Only two of these were among the schools approved for conversion by the DfE today. But a spokesman said others could follow later on.

While Christmas has come early for previously fee-paying parents, critics say that the policy is in effect using public money to fund private education. "State money is being used to better the education of a minority, a small number of children and their parents, and that is wrong," says Alasdair Smith, of the Anti-Academies Alliance. "Some of these new free schools are boasting class sizes of 15, but not everyone benefits. Essentially, this is about private education cornering a market for themselves at the expense of the taxpayer."

But Brigid Tullie, headteacher of Batley Grammar, in West Yorkshire, disagrees. She argues that her school is in an area with "one of the highest levels of deprivation in the country" and is meeting local need. Until Batley Grammar became a free school last month, there were no mixed secondary schools nearby.

Now, says Tullie, more local children have the chance to experience what Batley Grammar has to offer: "an excellent reputation for pastoral care and for discipline, behaviour, conduct, state of dress".

Batley Grammar, which had been a state school until 1978, began to struggle to attract pupils in the late 1990s when the assisted-places scheme (government-funded subsidies for children who couldn't afford to pay fees for independent schools) was abolished. "I have never seen us as a typical independent school," says Tullie. "The reason we started looking at things like academies and free schools in the first place was because we were undersubscribed … there just wasn't a fee-paying population in the local area and the demand for bursaries and financial assistance was increasing phenomenally."

Converting to a free school has enabled the school to increase its numbers from around 400 to 600, and Tullie says that the long-term aim is to bring numbers up to around 700 over three years.

Having more pupils (who are funded "per head" by the government) has helped the school to raise the cash to refurbish its food technology room and introduce new subjects, including Spanish to key stage 3 students (in addition to Latin and French).

In Tullie's office, the shelves are heaving with box files labelled "free school applications" (she received 124 applications for just two places in one year group, she says) and the only sign of the school's past is a black academic gown hanging on the back of the door.

Now Batley Grammar is a state-funded school, class sizes will increase, but Tullie says small class sizes can be overrated. "You tell parents how wonderful it is that they are getting all this attention, but in actual fact it is about the effectiveness of the teacher. Some people can be less effective in front of 10 than someone else in front of 25."

While keen to stress that free schools should not be seen as "some kind of lifeboat" for failing independent schools, Andrew Cook, headteacher of the Moorlands school in Luton, Bedfordshire – a fee-paying primary that also became a free school last month – has a similar story to tell. He describes his school – which charged fees of around £6,000 a year – as being in an "area of deprivation" and untypical of the independent sector. "We had a database of over 700 parents who wanted to send their children to the school, but couldn't afford the fees. Around a third of our students were already paying concessionary fees. There was clearly a demand."

Like Tullie, he argues that the school's conversion enables more children in an "impoverished area" to benefit from what Moorlands has to offer – namely, "a smaller scale, village-style school".

His aim is to keep class sizes at around 18. And critics who say it is unfair for some state-funded schools to be offering small class sizes when others are not are missing the point, he says. "If you look at the independent sector, you will find a great deal more is spent in pounds and pennies on individual students. If they can sustain that, why can't state-funded schools make the figures work so they can teach in classes of less than 30? I'm not saying that with a magic wand, all schools could reduce classes to 18, but there would be mass street parties from parents if they could just get that figure down to 25."

Moorlands hopes to increase its student numbers from 200 to 500 and Cook is quick to defend himself against accusations of exclusivity by pointing out that over the next three years – by his calculations – just 7% of parents will be what he calls "rollover parents", that is, parents who used to pay fees. As far as admissions go, the school prioritises children with a statement of educational need, looked-after children and siblings. It also has a priority admission area made up of six Luton wards which, Cook says, are "amongst the 10% most deprived in the east of England".

At Batley Tullie admits not all parents were happy about the conversion to free school status. Some even removed their children as a result. "You are always going to get one or two parents who have no problems paying the fees, and to them it is more important to say their child goes to an independent school. There were one or two who were like that, but it was a small minority."

Some pupils were anxious, too. "The children would make comments and they would say things like, 'Oh, you're going to let anybody in'," says Tullie.

One year 8 student tells me: "We did worry that new people coming in wouldn't be able to follow the rules or would be naughty." But a month in, she is pleased to report that the school hasn't been overtaken by riff-raff and that having more people in a class is "lots better actually".

But not all the independent schools that have converted to free school status are putting cash back in parents' pockets. Sandbach school in Cheshire was in the unusual position of being an independent, state-maintained comprehensive – a former independent school where the local authority used to "buy" a number of state-funded places each year. The practice had been phased out by the 1960s, but the school's status was never changed. This meant that although it was state-funded, Sandbach missed out on some of the perks enjoyed by other state schools; for example, it could not become a specialist school (and benefit from any extra funding) or an academy, despite being judged as outstanding by Ofsted. "Becoming a free school was the only way for us to access some of the additional freedoms," says the headteacher, Sarah Burns. "But on a day-to-day basis nothing really has changed."

The Priors school in south Warwickshire is another unusual case. The tiny village state school was threatened with closure in 1996. For the last 15 years, parents have kept it open through fundraising and volunteer work – hosting charity balls and garden parties, running a charity shop and divvying up the cleaning, gardening and administrative work between them.

Becoming a free school has allowed the school to get a cleaner, pay a music and French teacher and employ a full-time administrator. It has also been able to expand from two to three classes, which means pupils from just two rather than three year groups can be taught together.

But while parents don't miss the burden of trying to raise over £100,000 a year, the head of trustees, Tony Porter, says he doesn't want the fundraising to stop. "It really galvanised two villages with just a pub, a restaurant and no shop. The school became the focal point of the community and we wouldn't want that to change."

At a fringe event at the Conservative party conference last week, the schools secretary, Michael Gove, spoke of his ambition for a further 50 free schools in London in areas such as Kingston, Sutton and Richmond, where there is said to be a shortage of places.

A DfE spokesman said: "The government is allowing independent schools to become free schools so that high-quality education can be accessed by all – not just those who can pay or pass an entrance exam. As free schools are required to follow fair, transparent and inclusive admissions policies, independent schools entering the state sector will not be able to retain any existing academically selective admissions arrangements."