By Martina Fuchs

LONDON (Reuters) - Jackie Prosser is a determined mother. Working in fashion, she says she is highly exposed to the global recession, but plans to cut back on other treats to keep her seven-year old at his fee-paying school.

"Pulling my boy out of the school is the last resort," said Prosser, who is head of the Parents' Association at Cheadle Hulme School near Manchester, where basic fees range from 2,230-2,876 pounds per term.

As the slowdown deepens, some of the country's private schools are feeling the pinch -- even Eton College which has educated the elite for centuries has set aside emergency funds to help tide over cash-strapped parents.

Applications so far are not a problem, say many of the larger establishments that have built a franchise in educating the offspring of the world's wealthy and ambitious.

But mindful of the extent to which modern fortunes have been built on debt, Eton -- a boys-only school founded in 1440 -- has made preparations to help parents with its 9,360 pound termly lodging and tuition fees.

Some schools also hope the weak pound could assist those overseas parents who want to buy a British education.

"It remains to be seen whether some parents withdraw, but we have already promised assistance to a number of boys and we have reserved funds to help as many new applicants as possible with bursaries if they are needed," Andrew Wynn, the bursar of the college, told Reuters.

Smaller private schools in rural areas are already under threat and some could face closure, headmasters and researchers say. Sue Fieldman, editor of the Good Schools Guide publication, said more than 12 schools in northern England had closed or merged since September 2008.

"I expect that by July this year, about 2,500 families in the capital alone could ask for fee payments to be restructured or deferred as the credit crunch bites further into family purses," she told Reuters.

"Otherwise, 1,000 children in London would have to leave their private schools in their parents' worst-case scenario."

In the last recession in Britain in the 1990s, private student numbers declined by about 11,500, according to the Independent Schools Council (ISC).

ASIAN APPEAL?

The country's 2,600 private schools educate 7 percent of all schoolchildren in the country. Most children attend taxpayer-funded state schools but some wealthy parents choose to pay for extra facilities, strong academic records and the prestige attached to the private system.

The ISC says there are more than half a million students in independent schools. Overseas pupils make up about 4 percent of the total and accounted for fees of 438.18 million pounds in the year 2007/2008.

Sterling on Tuesday hit a 7-1/2 year low against the dollar, and was at a record low against the yen, undermined by interest rates near zero and heavy borrowing plans.

"The pound has weakened against the yen by 40 percent since January last year, so we expect more foreign students from Asia," Richard Murphy, a research economist at the Centre for the Economics of Education, told Reuters.

"It will be harder for U.S. private schools to attract foreign students, the demand will be bigger for private schools in the UK because of the good exchange rate," he added.

Asian pupils contributed 236.18 million pounds or more than half the 2007/8 fees, according to ISC data.

Dominic Scott, Chief Executive of the UK Council for International Students' Affairs, said he expected increasing numbers of well-off students to come to private schools in Britain, especially from China, Malaysia and Singapore.

"There are signs that if jobs become scarce, parents worldwide are more willing to spend money on the education of their children," he said.

In Hong Kong, Katherine Forestier, director of Education Services at the British Council, said there has been an increase in the number of students considering taking advantage of the weaker pound this year to get an education in Britain.

"I wouldn't be surprised if there's a 10 percent increase," she told Reuters. "In a downturn, education becomes more important ... and part of that is real competence in English, there's a growing demand for that in Hong Kong."

The Good Schools Guide's Fieldman noted that Asian parents are typically drawn to big-name boarding schools such as Eton, Harrow and Rugby, which she said are not hit by the crisis and the ISC's Chief Executive David Lyscom said the institutions in his organisation were still showing long waiting lists.

"Anecdotal evidence from heads suggests a healthy sector, and, much as we do not wish to play down the seriousness of the economic situation for the UK as a whole, it should not be assumed that the independent schools sector will be badly hit by the downturn," he said.

Mark Bishop, headmaster of the Trinity School in Croydon, south London, concurred, saying this slowdown was different.

"So far, there is a small number of parents struggling to pay fees. Applications for September 2009 are 20 percent up on last year, the highest it has ever been," he said.

In Manchester, Jackie Prosser said holidays or new cars are among sacrifices she would be prepared to make.

"A child's education has the highest priority," she said. "But who knows what is going to happen?"

(Additional reporting by James Pomfret in Hong Kong; Editing by Sara Ledwith)