They exist in a half-world, straddling the divide between state and private schools. Opponents drop dark hints about double-dipping or claim state schools are somehow missing out. But the parents of thousands of students attending the country's 326 integrated schools disagree.

Integrated schools are increasingly popular - more than one-tenth of students attend them and many of the integrated schools turn away hundreds.

But concerns are being expressed that this increased demand is causing the justification for their existence - their special character - to be diluted.

Those within the system have another worry, that while integrated school enrolments mount, the Government protects its network of state schools by preventing the creation and growth of integrated schools in parts of the country.

Integrated schools came about when legislation was passed three decades ago to preserve private schools at risk of closure.

It followed a century-long debate about whether the state should contribute funding to private schools. On integrating into the state system and receiving government funding, the schools could also charge attendance dues. Today, the same structure exists.

Individual integrated schools offer benefits tailored to their communities, some offering lower teacher-to-student ratios, others promising values-based support and discipline systems.

Several principals say these pay-offs are more important to parents of their pupils than academic results. But many of the principals approached by the Weekend Herald were reluctant to speak on the record. One principal said he did not want to risk speaking contrary to the Government's line.

The main point of difference of integrated schools is their "special character", which is unique to each school, and founded on religious or philosophical beliefs. Most are Roman Catholic.

National's education spokesman Bill English is a Catholic who sends his children to integrated schools. He fears for the future direction of the schools.

"[Labour has] always strived to have a uniform, one-size-fits-all state system with a high degree of political control from Wellington," he says. "What you are seeing now is the last gasp of centralised education. These schools created innovation and dynamism. The Government has tried to rein that in. But Government will have to pull back from control, and allow schools to seek their own direction."

English, a frequent visitor to integrated schools, says they must work to retain their distinctiveness. He is concerned about the degree of special character in some of these institutions.

"The staff are less Catholic [and] the kids are less Catholic," he told the Weekend Herald. "[The schools are] becoming less specifically Catholic-oriented and more values-oriented."

He points out that the Catholic school system used to be run by clergy, but as numbers of priests, brothers and nuns decline, laypeople are in charge of schools now.

"There's less and less obvious connection to Catholicism, and they are losing their distinctiveness. The big part of the attraction of integrated schools has historically been that they're different. [But] now if you go into the staffrooms of integrated schools, the teachers are no more religiously inclined than in a state school staffroom. In the long run, that can't work."

Brother Pat Lynch of the Association for Proprietors of Integrated Schools and Catholic Education New Zealand, would not explicitly deny the validity of Bill English's statement.

"I'm not saying that [the statement is flawed]. The reality is that people would have difficulty accepting that statement. But [integrated schools] are going to have to get stronger in terms of what they stand for, because if their special character is not clear and not demonstrable, then they have no reason to exist."

Robyn Prior, chair of the Association of Integrated Schools, is shocked by English's comments. Prior was only willing to discuss the issue of special character and said, "I'm absolutely staggered that Bill English said that, because it's completely the opposite of what he told the integrated schools," she says.

"He told us the strength of integrated schools lay in their special character and that it was very clearly and overtly expressed in the schools."

There is no formal assessment of the special character of all integrated schools and disregard for the founding special character could go unnoticed.

The Weekend Herald viewed Education Review Office (ERO) reports for six integrated schools in different parts of the country, and found that analysis of special character was lacking. The ERO said the Association for Proprietors of Integrated Schools reviewed special character and passed its findings on to the ERO. The association denied this.

Joy Quigley, director of the Association of Independent Schools and a former National MP, challenges the fact that only 5 per cent of students in integrated schools can be "non-preference" - students who do not fit the school's special character. Quigley suggests the number is much higher.

"Even some of the nearest and dearest to the Catholics have told me that there are 'cafeteria Catholics' - people who only have a fairly scant association with the special character but because they like the school, they convince the proprietors that their child meets the criteria."

In the past the Government and the Ministry of Education have not seen eye-to-eye on integrated schools. A ministry discussion paper in 2003 noted that parts of the Private Schools Conditional Integration Act were unnecessary.

It even noted that parts of the act were in place to safeguard special character from "a possibly unsympathetic central bureaucracy", an indictment on the Government. But in 2004, pressured on the school closures issue, former Education Minister Trevor Mallard abandoned a review of integrated schools.

Integrated schools had been unaffected by the controversial network review of state schools, as the Government cannot legally close an integrated school or merge it with another.

A spokesperson for Minister of Education Steve Maharey questioned the demand for integrated schools. He said the Government had no plans to review the Integration Act, but would not comment on the restrictions placed on integrated schools by the Government.

The Government has capped integrated schools' roll numbers, a stumbling block for schools with the capacity to accommodate more. Roll increases are allowed only in areas of student population growth, and as long as the increase does not affect state school enrolments. The Government allowed a roll increase of 100 at John Paul College in Rotorua.

"Parents are prepared to pay, so they say it's no concern of anybody else," says Quigley. "Maybe they look at it as a cheaper form of an independent school because it has the special character. There's an inherent unfairness: poor people don't have choice. It's [also] unfair that people who want to have choice outside the state system have to pay dearly. As a taxpayer it makes me annoyed, because [funding per head] should follow the child [regardless of school].

"But in some ways I think it would be really good if every school was integrated. The proprietors would charge some fees, but the kids would be fully funded [by the Government] to go to the school of their choice. There would be government oversight, but there would be choice."

Many schools' dues, which can only be used for land and property, have been increasing, with some as high as $5800. The ministry expected dues to decrease over time, but Lynch says proprietors were requiring "hundreds of millions of dollars" to maintain their schools.

John Minto, of the Quality Public Education Coalition, says if a school were to receive Government funding, it should be obliged to be non-selective and accept all applicants.

"This should have been addressed years ago, but Labour has simply turned a blind eye to the issue. We are heading towards a differentiated education system because of the fees that schools charge. The money is going back into the schools, but if there is to be equal opportunity the quality of education should not depend on the ability of parents to pay."

The Minister of Education - not the ministry - can decline applications from private schools to integrate. Since 1998, 18 schools have been integrated and six proposals rejected.

"We have closed seven or eight integrated schools because the proprietor and the Crown agreed they weren't viable," says Lynch. "We're not in the business of saying, 'We're going to keep a school open irrespective of everything else'.

"We are in partnership with the state. Partners, from time to time, see things differently, but we have an excellent working relationship."

It is understood that similar models to New Zealand's integrated schools exist in some parts of Europe. Debate has begun in Australia over whether such a model would be feasible.

"At rock bottom, people want to send their children to integrated schools because they stand for a view of the world which parents make a connection with," says Lynch.

"They endeavour to offer a level of education for the needs of the whole person. That doesn't mean that state schools don't, but this is something that integrated schools are happy to hang their hats on."