If, as they say, clothes maketh the man, then used clothing maketh a great business from which schools benefit.

Bag2School Ltd, which employs 16 full-time staff from England and Eastern Europe at its headquarters at Omega Business Park, Northallerton, is quite simply a clothes recycler.

It diverts thousands of tonnes of textiles from landfill each year by collecting unwanted clothing and shoes from schools and paying them £250 per tonne in return.

The clothes are then sold on to countries like Latvia and Lithuania where they are resold in shops and boutiques.

With its network of 15,000 participating schools all over the UK, including 600 in North Yorkshire, it has paid out more than £600,000 to schools throughout Yorkshire where 1,500 tonnes has been diverted away from landfill.

Now Bag2School is pitching for the Best Business And Education Link title in The Press Business Awards 2007.

The firm was the brainchild of Marcus Fitch-Peyton, a well known "rag trade" figure, who recruited retired Detective Inspector Ted Childs as director of operations in 2001. With area managers and collection teams helping the process, demand soared as schools saw the benefits.

To date, Bag2School has paid out more than £4 million to parent teachers associations, enabling them to fund new equipment and facilities, school outings and transport.