NEW ORLEANS (AP) – The slimy mildew clinging to classroom walls for years, the termite-eaten floors, the paint peeling from school ceilings – Hurricane Katrina washed all that way.

The storm that destroyed much of this city also devastated the New Orleans public schools.

But that wasn’t all bad.

The system, regarded as one of the worst in America, had been rotting for decades: Buildings were neglected. Kids weren’t learning. Millions of dollars (euros) were squandered or stolen.

Now, six months after Katrina, only a small number of schools has reopened so far, but many people see the storm’s destruction as a unique opportunity to rebuild a system that had no place to go but up.

“This is the silver lining in the dark cloud of Katrina,” says Sajan George, a turnaround expert who began working at the schools before the storm. “We would not have been able to start with an almost clean slate if Katrina had not happened. So it really does represent an incredible opportunity.”

But how does a school system reinvent itself in a city when money is scarce and misery plentiful?

Boldly.

That’s what some educators are proposing with a plan that calls for a major shakeup: Schools would be grouped in clusters run by managers. Students would have choices about where they’d attend. And most money and hiring decisions would shift from the superintendent’s office to the principals, who are considered more attuned to their schools’ needs.

“We have to have a whole new mind-set about how we approach public education,” says Scott Cowen, president of Tulane University and head of a mayoral committee that developed the plan.

But change won’t come easily.

There’s a long history here of squabbling among board members, scandal and academic failure. And that was before Katrina. Now there are new headaches: Thousands of teachers have no jobs. Parents are frustrated with the slow pace of school reopenings. And insiders are openly skeptical of plans for the future.

“I don’t think you turn around a failing system by changing the structure of the system,” says Ora Watson, interim superintendent of the New Orleans public schools.

Watson also feels not everyone is being heard.

“Some people are being left out of the conversation,” she says. “I’m talking about poor people, people who populated the schools, the African-American community.”

The Bring New Orleans Back Education Committee that developed the plan says it consulted a diverse group of more than 1,500 people from New Orleans, including teachers, parents and students, along with experts around the US, and is committed to creating top-quality schools in every neighbourhood.

The Orleans Parish school board has endorsed the plan.

It has been no secret something had to be done to fix a system so mismanaged that budgets hadn’t been balanced in five years, teachers often received inaccurate paychecks and corruption was endemic.

The system was already on the brink of financial collapse when Katrina roared in, severely damaging about a quarter of the schools: Roofs caved in. Fierce winds blew out walls and hurled desks through windows. Floodwaters drowned about 300 buses.

Total losses could reach as high as $1 billion (euro830 million).

It took three months for the first regular public school to reopen. Now, 20 schools are holding classes, with about 9,500 students – slightly more than 15 per cent of some 60,000 enrolled before the storm. Three more schools may open in April.

Some parents grumble that’s not enough, but caution makes sense, says Bill Roberti, another Alvarez & Marsal managing director. “Do you rush and open them the way they were,” he asks, “or do you take the time and try to fix them?”

Most people here expect a smaller school system in the years ahead. The state estimates about 28,000 students will be back this fall in about 50 schools.

Educators say turning the schools around will take years, maybe even a generation, and they know many residents – including those who want to return – will be looking for signs of progress.