Free schools are new state-funded but privately-run schools set up under the academies legislation. Free schools represent the most overtly market-oriented policy within the Conservative-led Coalition government's school reform programme in England and have provoked intense controversy, centering on issues of pupil attainment, social equality, democracy and privatisation. This paper evaluates the evidence for the performance of the models on which the policy is based: charter schools in the US, free schools in Sweden, and Labour's academies. The potential impact on local schools is assessed. Issues of democratic accountability are discussed, in terms of the application process, the governance of free schools, and their impact on local authorities. Factors affecting the future trajectory of the free school initiative are discussed, including the opportunities for private companies to set up and run free schools for profit. The paper concludes by considering the challenge which free schools represent to their critics.