"It's controversial not just because the decision will directly affect the sports provision of neighbouring schools, but because this is a Church of England school which is 50% selective on faith grounds. It's fulfilling a desire not a need."
From what I've read (but without looking at the numbers), Hove do have a needs-case, because there's a bulge coming through the system as there is here.
However, you're right that the project was also driven by the desire for some local parents for a CE school. As I've said before, the free school policy defines 'need' as "a combination of: parental demand, including demand for the specific school model proposed; basic need for places;or low existing standards in the area".
Setting aside the debate about whether the definition is a good one or not, my impression is that Kings ticked boxes with all three of those criteria, because some of the other local schools have not been rated highly by Ofsted in the past.
As we know, free schools are effectively the only way of creating new schools under the new Education Act (apart from VA). Hove reportedly does have a 'need' in the traditional sense of shortage of places, so I assume that's why the council are calmly accepting the new school, despite the fact that some of their incumbent politicians aren't fans of the policy itself. To deny that need, just because they didn't like the free school policy, wouldn't look good for their chances of re-election.
"Its admission policy seems little different from a VA school like Christ's"
Yes, its similar to Christs' current policy. However, as a VA school Christs could legally have up to 100% faith admissions. They just choose not to. In contrast Kings' admissions are capped at 50:50 because its a new Academy.
Kings are holding a consultation on their admissions policy at the moment, so it will be interesting to see if the local campaign has any influence on that.
"the land is actually transferred to the trust"
Yes, that's what it looks like, though I haven't checked the details. However, the trust does sign a funding agreement with the DfE, which presumably states that they can only use the land for the school; they can't decide to close the school and use the land for some other purpose.
"Is it likely that the DfE could also seize part of the grounds of an existing school"
I don't think that's likely.
"And it also seems to me that it would be as complicated to change a sponsor and/or religious organisation involved with a free school (I'm not entirely sure of the relationship between them in this case) where the trust actually owns the land, as taking a VA school back under council control."
No, I think that if the funding agreement is broken, then the assets would all transfer to the DfE. Again, I expect that is all in the funding agreement. I'll have a look when I get the chance.