CROSS PLAINS, Wis. — A federal appeals court, in the first ruling of its kind in the U.S., has ordered the state of Wisconsin to stop funding a "virtual academy" that allowed children to learn from home.

The court ruled that the academy allowed parents to be the primary educators — a violation of a state law requiring public school teachers to be licensed.

And the three-judge panel said, districts that operate virtual schools cannot receive taxpayer money for students who do not attend classes within their boundaries.

School districts across the country are closely watching the case, which could force the academy to close and help determine the future of online education. More than 90,000 students from kindergarten through high school are enrolled in virtual schools nationwide.

Virtual schools operate in Hawai'i and 17 other states, according to the Virginia-based North American Council for Online Learning, a trade association.

The recent decision could shut down other Wisconsin virtual schools, which enroll a total of 3,000 students.

The ruling placed the Wisconsin Virtual Academy at the center of a national policy debate after critics raised a key question: Do virtual schools amount to little more than homeschooling at taxpayer expense?

Supporters say the schools are a godsend for parents who prefer their children learn from home. But opponents, including the nation's largest teachers' union, insist the cyber charter schools drain money away from traditional schools.

Barbara Stein of the National Education Association, the teachers' union, objected to the use of tax dollars to support what she called a new form of homeschooling.

Susan Patrick, president of the North American Council for Online Learning, a trade association, said, "People are paying attention because online learning is really a growing phenomenon. And for us to arbitrarily shut down online learning for students is a really dangerous precedent to set."

Virtual schools generally require parents to lead daily lessons. Licensed teachers monitor students' progress through e-mails, online classes and tutoring.