Subject to paragraphs (3) and (4), paragraph (2) applies in the case of a school which became a grant-maintained school before 1st April in the financial year in question and in respect of which the amount first referred to in regulation 8(1) (determination of Central AMG) or, where the funding authority determine an amount under regulation 9 (Section 11 funding) in respect of the school, the aggregate of those amounts is less than 87.5% of the amount which was determined in respect of the school for the preceding financial year under (as the case may be) regulation 10 (amount of percentage addition) (ignoring for this purpose the effect of regulation 11 (cash protection)) or regulation 18(4) (amount of percentage addition under alternative method of determining amount of maintenance grant) of the 1995 Regulations.

In any case to which this paragraph applies, regulation 8 (determination of Central AMG) shall have effect as if it required the funding authority to determine an amount equal to 87.5% of the amount which was determined in respect of the school for the preceding financial year under the aforementioned regulations of the 1995 Regulations.

Paragraph (4) applies where a school, which became a grant-maintained school before 1st April in the financial year in question, is significantly enlarged, as part of proposals involving the discontinuance of another school which also became a grant-maintained school before 1st April in the financial year in question, and in respect of the first mentioned school the amount first referred to in regulation 8(1) (determination of Central AMG) or, where the funding authority determine an amount under regulation 9 (Section 11 funding) in respect of that school, the aggregate of those amounts is less than 87.5% of the amount which was determined in respect of both the schools referred to above for the preceding financial year under (as the case may be) regulation 10 (ignoring for this purpose the effect of regulation 11) or regulation 18(4) of the 1995 Regulations.

In any case to which this paragraph applies, regulation 8 (determination of Central AMG) shall have effect as if it required the funding authority to determine such amount as appears to them to be fair and reasonable, being not less than the amount first referred to in regulation 8(1), or, where the funding authority determine an amount under regulation 9 (Section 11 funding) in respect of the school, the aggregate of those amounts, and not more than an amount equal to 87.5% of the amount which was determined in respect of both schools for the preceding financial year under the aforementioned regulations of the 1995 Regulations.