WILL and JADA Pinkett Smith’s marriage was dealt another blow after the controversial private school they founded was shut down.

The New Village Leadership Academy, which was located near the couple’s man­sion in Calabasas, Calif., has been a sore spot in Will and Jada’s mar­riage since it opened in 2008, a source says. And things only got worse when it was abruptly shuttered.

“Will told Jada from the start that opening this school could be a legal nightmare,” said a friend. “He never wanted to do it.

“But Jada promised him that it was an excellent school and there was nothing to worry about. Now he’s flipping out,” the source said, “and unhappy with Jada for the humiliating closure.”

The school came under fire in the past for using “Study Technology” – a teaching method developed by Sci­entology founder L. Ron Hubbard. The implementation of the program led to blistering accusations that the school had an affiliation with the controversial church – a charge Will, 44, and Jada, 41, vehemently denied. Will and Jada have previously denied that they are Scientologists.

The school has also struggled with finances, piling up more than $1 million in liabilities by 2011 despite charg­ing its students between $7,500 to $12,000 in tuition. Disgruntled parents charge that the number of kids en­rolled was deliberately kept low so the acad­emy would not be subject to certain state standards.

“There have been students who went there and claimed they couldn’t even read when they got out of sixth grade,” the source continued. “When the school opened, everyone thought it was going to be an uplifting expe­rience and good for the kids, but it turned out to be a nightmare.”