"What will the original proposers do if the head doesn't do the job they intended or they find out that they want to end the contract, when the advisers are so heavily involved with trusteeship and governance?"
The school Heads are accountable to the school Governors, as they are at any other school. They are also accountable to RET. Underperformance would be identified and dealt with as it would in any school will an effective board of Governors.
"By the way, I still can't find any reference to EL's involvement in London Challenge."
Follow the link to the report, open the document called "Evaluation of the City Challenge programme" and look at the pages I listed.
"How do you know that RET/EL aren't making money out of setting up free schools?"
Because the funding agreement with the DfE prevents that. I suggest you read it.
"I'm also bothered by the involvement of a former DfE adviser. From an outsider's perspective, this smacks of "jobs for the boys"."
The DfE employs a lot of senior educationalists as advisers, many of whom are successful Headteachers on secondment. They're exactly the sort of people who should be involved in setting up new schools.