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In a Brooklyn school district where only one out of five children can read at grade level, Public School 308 is regarded as a kind of oasis of academic achievement: its students are admitted on the basis of competitive entrance exams, and their math and reading scores rise above those of many other schools.

But the district superintendent suddenly removed the school's principal last semester. Why? Was she a casualty of political feuding among district officials or was it because $24,000 in school funds is missing? Or is it philosophical differences about running the school?The principal, Gail Bell-Baptiste, who led P.S. 308 for two and a half years, says the reason is a political dispute with the district superintendent, Margaret A. Bradley, and one faction of the school board, led by a veteran board member, David Miller.

Last May, an opposing faction that included the P.S. 308 parents' association president took control of the board. Bell-Baptiste said she suspected retaliation.

But Miller, a maverick community advocate who has unsuccessfully run for the State Legislature and Congress, in turn, points to improprieties: earlier this month, the chancellor's office of special investigation found that about $24,000 from school fund-raising drives last year was unaccounted for, though the inquiry has not implicated Bell-Baptiste. The investigation also found that she was letting some parents eat lunch with their children for free.

With the support of parents and political allies like Assemblyman Albert Vann, whose district includes P.S. 308, Bell-Baptiste is fighting for her job. The school board will decide her fate Thursday, subject to review by Chancellor Rudy Crew. In a highly unusual move, Crew met with the principal and the district superintendent on Monday and said, through his spokeswoman Chiara Coletti, that he hoped the dispute would soon be amicably resolved.

Central to the Bell-Baptiste dismissal is a philosophical fight over how to teach the brightest of Bedford-Stuyvesant: in a city where poor children rarely have access to high-performing schools, what exactly is the mission of a magnet school for the intellectually gifted, and how should it be run?

The principal contends that she has done nothing but run a good school, demanding orderly behavior and high academic standards of her students and discharging those who did not keep up. "Get gifted or get out," is her philosophy for P.S. 308.

To Bell-Baptiste, who grew up in the same Bedford-Stuyvesant brownstone where she now lives and who had to commute to a gifted program in Bensonhurst, P.S. 308 is an intellectual greenhouse for what she calls Bedford-Stuyvesant's "Talented Tenth" - W.E.B. DuBois' term for the cadre of the brightest and best educated black Americans, and who he argued would be its future leaders.

"This center for intellectually gifted children is important because these kids should not have to go outside the neighborhood or to a private school to get rigor, to get challenged," she said in an interview.

Her willingness to expel children because of poor scores on standardized tests has caused friction with Bradley, herself an expert on gifted education.

Neighborhood children can enroll in P.S. 308 for kindergarten and first grade without taking an entrance test, but they must transfer out after the second grade if they do not pass an entrance exam.

To remain in the school through the eighth grade, children have to score high on citywide tests and maintain their grades and good behavior. P.S. 308, Bell-Baptiste maintained, should not be spending its resources on children who cannot keep up.

"If you can't come in and stay and you can't read, I have to come up with a program for kids who don't read, which takes my energy away from reaching the stars," she said.

But Bradley says that the program should be run more creatively and that children who perform poorly should get extra help. "We can't penalize children," Bradley argued in a recent interview. "We should be more concerned about their learning than what their specific score should be to stay in."

Last fall, Bradley assigned an "enrichment teacher" to help children who are having problems with reading. She said she was considering allowing neighborhood kids to stay in P.S. 308 regardless of entrance exams.

The debate over P.S. 308's mission dates from its opening in 1985, when parents and educators feared that it would siphon the best students from District 16 schools. For the next several years, though, things were calm.

In the fall of 1994, Bell-Baptiste, then working as an attendance teacher at Junior High School 57 in the district, took over the school.

The following summer, the chancellor took over the District 16 board, which was deadlocked over selecting a new superintendent, and installed Dr. Bradley, a former principal in Queens.

In last spring's school board elections, the deadlock was broken by a victorious faction of five parent-candidates, who included P.S. 308's PTA president, Caroline Archer.

The chancellor's office of special investigation began looking at fund-raising activities at P.S. 308 last August. And in November, Bradley removed Bell-Baptiste from the school and reassigned her to the district office. She also asked the chancellor's office to widen its investigation. Neither Bradley nor the chancellor would comment on the investigation, citing the confidentiality of personnel matters.