An auto dealership based on the grounds of a primary school that was built using charity funds will be demolished in order to rebuild the school in northwest China's Shaanxi Province, local authorities said Tuesday.

Although Weida Automobile Services built the store on the basis of a 10-year lease signed with authorities of Zhaocun village, Weinan, the Weinan municipal government has identified the auto dealership as an unauthorized building and called for it to be demolished in order to rebuild the school.

Meanwhile, the Weinan municipal government has said that students should return to school by the end of March, a source with the government information office said.

The government has also urged the village committee to rescind the lease to ensure the proper settlement of the dispute.

The school, Zhaocun Yifu (Run Run) Primary School, named after the Hong Kong philanthropist Run Run Shaw, was built in Zhaocun in 2009 with an investment of 1.9 million yuan (about 302,000 U.S. dollars), of which more than 254,000 yuan was donated by a Run Run Shaw fund.

But just two weeks after pupils moved into the new school in May 2010, they were forced to return to their former shabby classrooms and were told that the newly-built school was reserved for other purposes, village residents said Monday.

According to the lease contract, the village committee will receive a total of 1.75 million yuan from Weida Automobile Services.

The auto retailer has transformed the classrooms into warehouses for vehicle components, and has built repair workshops and car showrooms on the school's playground.