The Lubavitch movement is set to turn a corner in its battle against debt with plans for two more of its schools to become state-aided.

Its senior girls' and boys' primary schools hope to have aided status approved by Hackney Learning Trust early next year, joining the girls' primary, which became voluntary-aided in 2004.

Chabad Lubavitch UK chief executive, Rabbi Bentzi Sudak, said state aid would "fundamentally change the landscape for the organisation. Aside from higher educational standards for the future leaders who will graduate from our schools, aided status will significantly reduce the load, enabling us to invest more resources directly into outreach, social services and new innovations for a changing Jewish community."

Lubavitch schools exact a heavy toll on the organisation's finances, operating at a deficit of £820,000 in 2009, according to the movement's accounts for that year, which were finally submitted to the Charity Commission last month, a year after they were due.

The movement, which has had to sell property to clear off debt, recorded an overall deficit of £800,000 in 2009, although that was a "substantial improvement" on its £1 million loss the year before.

Fee remissions for parents of pupils at the schools rose from £5,000 in 2008 to £117,000 in 2009 - a sign of tough economic times.

Donors have to date contributed 70 per cent of the £350,000 needed to enable the boys' primary school to move into the state system, Rabbi Sudak said.

He explained that the delay in compiling the accounts was due to the complexity of consolidating the funds of more than 30 Lubavitch institutions.

Lubavitch is now able to reclaim Gift Aid payments, which had been suspended by Revenue and Customs until it had paid arrears in payroll tax and National Insurance contributions.

During 2009, the movement, which raised £5.7 million, continued to expand, opening three new Chabad centres for students.  

"These positive developments illustrate the current momentum of the organisation, with more initiatives and exciting developments to arrive in the near future," Rabbi Sudak added.

The accounts record that as many as 35 graduates of Lubavitch's London yeshivah now serve as rabbis of United Synagogue and other central Orthodox congregations in the UK.

They also reveal the significant presence of the Sudak family within the organisation.

Rabbi Nachman Sudak, its principal (and father of Bentzi) and his extended family hold 20 positions in the organisation with a combined income of nearly £570,000. The highest paid is Rabbi Nachman Sudak's wife Fraidel, head of the junior girls' school, whose annual salary was £60,000 in 2009.