The six-month consultation project, led by former public service commissioner Andrew Podger, called for a complete overhaul of governance, funding, academic direction, enrolments, staff culture and community engagement.

Professor Podger called on ANU Vice-Chancellor Brian Schmidt to publicly acknowledge that the university had failed to manage challenges and had allowed distrust and emotional stress to "fester" over a number of years.

"It is clear to me that the status quo is unacceptable," Professor Podger said. "It is not attracting the numbers of high potential students the national university should and normally does expect.

"It is not delivering the excellence in teaching required of a top university and it is not meeting the reasonable expectations of the national capital's community."

The report was welcomed by Professor Schmidt who announced a $12.5 million investment over five years to rebuild the school's academic and performance programs and improve workplace culture.

But Professor Schmidt said the university would need to rely on community contributions of $800,000 including private business sponsorship or philanthropic donation to rebuild the school's advanced performance program.

"The reality of Canberra being a small city means that we need community support to offer a more advanced program, which will help underpin a strong music culture in Canberra," he said.

"I'm asking the community to rally behind the university and the school in building a vibrant future.

Professor Podger warned the investment would need to fund a "substantial rebuilding" of the school rather than a simple return to the past.

ACT Chief Minister Andrew Barr said his government would provide the school with $250,000 in grants for four years, if re-elected later this year.

The Podger report, which relied on interviews with more than 50 individuals and groups and 40 public submissions over six months, presented the university with two future models.

The first, preferred by the majority of those consulted and the vice-chancellor, would reinvest in advanced musical performance but require significant investment from the university and the Canberra community.

The second "more modest" option would not require external funding or advanced performance teaching but would fall well short of community expectations.

The report found that while no one was singularly to blame, mistrust among staff extended to senior academic and professional staff in the College of Arts and Sciences and the Chancellery.

Professor Podger recommended a moratorium on action initiated by the university to pursue instances of mismanagement or misbehaviour, warning it would only distract from the task of saving the school.

"It would not deny the right of any individual to pursue a complaint and the university should certainly seek to resolve quickly and amicably any outstanding issues of past mismanagement or misbehaviour," he said.

"Rather it would mean the university should not initiate action," he said.

The school wil remain within the College of Arts and Social Services although the report raised the prospect of an advisory board to represent itself. Professor Schmidt said this option would be considered.

The school has failed to attract a new head of school after the shock departure of Peter Tregear in August last year. Many believe this was due to his confrontation with management over staff workloads and resourcing.

The school had offered the position to an American academic and musician although he declined the officer after months of negotiation.

Professor Schmidt said the recruitment process was "well advanced" and a replacement would be appointed in the near future.

"We've had a good field, and the new head will be joining a school that has financial certainty and the clear backing of the University and the community to succeed," he said.

The new head of school will be tasked with creating a new charter of ethical behaviour and leadership development.