Rugby School, a surprise performer last year, has confirmed its place in the premier league of independent schools this year by edging into the FT's top 15 for the first time.

By achieving more than 30 points per candidate, the equivalent of three A-grades per pupil, the co-educational boarding school joins an elite group that has historically been dominated by single-sex private schools.

Last year, the 434-year-old school leapt from 74th to 17th place in the FT's top 1,000 schools league table following a turn-around engineered by former headmaster Michael Mavor. This year it takes 15th place. The job of maintaining the school at this pitch now falls on Patrick Derham who takes over as headmaster this term.

Sitting at an antique leather-topped desk under a portrait of Rugby's most famous principal, Thomas Arnold, Derham admits to feeling the weight of tradition bearing down on him.

"You're walking a political tightrope," he says. "It's important for the school to remain true to its traditions and values, but we can't rest on our laurels, we have to keep moving forward."

It's instructive that Derham, a lover of 19th century history, has gone out of his way to obtain an energising, contemporary portrait of Arnold to grace his wall. It creates a very different mood from the smoky green, stained glass image of the formidable headmaster in the 18th century classics room.

Mavor is credited with engineering Rugby's renaissance from a conservative, under-performing boys' school into one of the country's best co-educational boarding schools.

Following the admission of girls in 1993 and a sustained and dramatic improvement in academic performance, Rugby School has at last emerged from the shadow of the novel Tom Brown's Schooldays, which defined it as a place of bullying and cruelty. Fagging has long been banned and girls have smoothed the school's rough edges. Ironically, the girls' first hockey team is out-performing the boys' rugby team.

This must come as a shock to old Rugbeians, some of whom protested against the election of the school's first head girl in 1995, remarking that "she can't expect to have our respect when she's not in the first XV".

In the classroom, academic performance across the sexes is roughly equal. Boys achieve an average of 29.9 points per subject compared to girls' 31.53.

Derham says the ethos of the school has been completely transformed into a "successful, vibrant and positive place where everyone is valued". In fact, he would not have been interested in the post had Rugby remained as of old.

He attributes the turn-around to the hard work of staff and pupils under Mavor's inspired guidance. "The school worked very hard at encouraging and rewarding success but, at the same time, it's not an academic hothouse," he says.

"This is not a highly selective, single-sex school, but a broad church where everyone is encouraged to achieve their full potential."

Admittance is on the basis of performance in the common entrance exam for private schools. About 20 per cent of Rugby's pupils receive financial assistance of some kind towards fees (about £17,550 a year, boarding), and three or four places a year are reserved for state pupils who live within 10 miles of the school.

The school, which accommodates about 800 pupils, is generally oversubscribed, with class sizes averaging 20-24 in the first three years of high school but only about 10 per class in the sixth form. Last year, almost 15 per cent of the sixth form (24 pupils out of 168) were accepted into Oxford or Cambridge universities.

Derham has no immediate plans to introduce any changes, believing that he must first immerse himself in the school - even to the point of shadowing a pupil for a day. He is himself a product of boarding school culture and a hearty defender of the house system, pioneered by Arnold and still dominating life at Rugby today. As such, he understands the importance of treading warily in matters involving Rugby's traditions and idiosyncrasies.

Derham was educated on the naval training ship Arethusa, a 19th century wooden frigate now docked in Chatham.

"If it hadn't closed down I would probably have gone into the navy at age 16," he says. Instead, he was shifted to Pangbourne College and so entered the privileged world of private education, later becoming a history teacher and housemaster at Radley College. From 1996 he was headmaster of Solihull School.

Derham is pledged "to ensure that Rugby remains the top co-ed boarding school in the country", saying: "I'm a great believer in a climate of praise, encouragement and of making expectations high and consistent.

"We will strive to deliver the best for each pupil and would look to maintain our position on a five-year average, but we won't be raising our admission standards and becoming highly selective because that would affect the all-round education we strive to provide."

In Rugby's case, an all-round education encompasses access to a broadcast quality TV studio, astronomical observatory and a fully equipped theatre. Nearly every child has a laptop or personal computer. The design centre and new science building offer state-of-the-art laboratories and work rooms that would be the envy of some universities, while school clubs run to polo and clay pigeon shooting.

If Arnold's aim was to turn out model Christian gentlemen, then Derham feels "the modern Rugbeian should leave fully equipped with all the life skills - the adaptability, the IT-literacy - to make their mark on the wider world".

He believes passionately that every pupil has a talent and that it's the job of a good school to find and encourage it.

"My message to pupils has been that their motivation is more important than their ability, that motivation is a greater life quality. It's desperately important in everything."