However, Haringey Council has suspended free entitlement funding for the school in Tottenham until they receive proof that all links with Hizb ut-Tahrir have been severed.
Haringey is one of the pathfinder local authorities for the extension of the nursery education grant to 15 hours.
During prime minister's questions David Cameron claimed that both schools, which are run by the Islamic Shakhsiyah Foundation, had received £113,000 of Government money, some of which came from a pathfinder scheme Preventing Violent Extremism.
It later transpired that Mr Cameron had confused the name of the scheme with the pathfinder funding for the free entitlement.
Mr Cameron alleged that the schools were ‘a front' for Hizb ut-Tahrir.
In a letter yesterday, schools secretary Ed Balls hit back at a series of allegations made by shadow schools minister Michael Gove that the schools in Tottenham and Slough had not been properly inspected and registered by Ofsted.
He also refuted Mr Gove's claim they had made 'inappropriate use of public funds'.
In the letter Mr Balls said that the schools were entitled to receive early years funding.
He said that after the allegations were made officials from Haringey visited the school to make sure that the early years provision met the standards of the Early Years Foundation Stage.
He wrote, ‘The investigation found no evidence to suggest inappropriate content or influence in the school. Furthermore I understand the school has written to state that it no longer has any links with any of the individuals who are alleged to have connections with Hizb ut-Tahrir.'
Both schools had trustees that were until recently members of the group or married to a prominent member.
Haringey Council confirmed to Nursery World that over the last three financial years the school had received £102,000 in total for the free entitlement.
A spokesman for Haringey Council said, ‘An investigation was launched on 26 October immediately after concerns were raised.
‘Funding was also immediately suspended pending the outcome of that investigation which is now almost complete.
‘We visited the school at the earliest opportunity to make sure the early years provision continues to meet the requirements of the Early Years Foundation framework. No evidence was found to suggest inappropriate content or influence in the school.
‘The school wrote to us on 20 November stating that it no longer has any links with any of the individuals who are alleged to have connections with Hizb ut-Tahrir.
‘We are waiting for evidence from the school that the reported connections have been completely severed. The school is taking steps to make sure that pupils learn about different cultures and traditions. One way in which it is doing this is through joint work with a local Church of England primary school.'
