The Brodetsky primary in Leeds is reviewing all services it receives from the local authority after being charged thousands of pounds above commercial rates for its council-run internet service.
Brodetsky has cancelled its £10,000 annual contract with Leeds Learning Net after a private firm offered a better service for a quarter of the price.
And despite government assurances that schools would not suffer because of its spending review, Brodetsky will also be losing tens of thousands from its annual budget.
Headteacher Jeremy Dunford said Education Leeds had failed to make the internet service competitively priced, although it did offer to drop the charge to £6,000.
"This isn't political. We are in difficult times and things have to be reined in a bit.
"But it will result in difficult decisions for schools to save money. We are reviewing every contract we've got to make the best environment for the children."
Mr Dunford added that the school's core budget of £950,000 was likely to be reduced by £11,000 next year. In addition, the government had sliced £32,000 from a building maintenance grant.
Educational services like teacher training, previously provided free by the council, would now be charged for.
"If we choose to buy in those services our school would lose tens of thousands of pounds. If we can find a good value provider locally within the community we will always try to use them instead," he explained.
Leeds City Council would comment only on the Leeds Learning Net element, accepting that the service "was possibly seen as expensive by some schools. As a way of dealing with this, Leeds City Council undertook a consultation exercise with all schools to help review and shape the LLN to ensure the services offered were based on school priorities at best value prices."