A slightly more factual version from the Guardian: http://www.guardian.co.uk/lifeandstyle/wordofmouth/2010/feb/12/lamb-school-teaching-andrea-charman
Now OK, threats against the poor woman who introduced a lamb to a school are lunatic, criminal and in every way, not on. To me, the project seems like a good idea.
That said,I don't think it is that odd that people objected to this, and I think that dismissing those objections as sentimentality is simplifying things. Food is controversial stuff, and so are interactions with animals. It's not lunatic for a principled vegan or vegetarian to object to this type of project, as many of them do to all animal farming. There are a lot of veggies out there, if they think something is wrong, I don't really see why they should not say so (within the law).
I'm not even sure that it's unreasonable for a meat eater to object, actually. If I have this straight, there is a mechanism in most mammalian predators which discourages the consumption of familiar prey animals - I've forgotten the technical term. It's the reason that, for example, the damn cats can bring a mouse into our house and if he makes it through the first 24 hours or so, all six felines will then decide he's a family member. Mr Mouse is then free to run riot on a diet of cat biscuits until the human residents finally manage to apprehend him and fling him from the house with curses on his head.
It's the reason I can have a sighthound who would cheerfully kill a wild rabbit sitting by the fire with a rabbit in my living room. There are rain forest tribes that think it's really horrible to kill and eat a pet animal - animals for eating are hunted wild animals, animals that live with you are family members.
We - and other predators - do have an ability to accept other species as members of our family. If we didn't, we probably wouldn't have predator-species companion animals like cats and dogs, and very likely we'd find living right next door to people who aren't in our immediate family pretty difficult too.
So, yes, it's a good idea for children to know where their food comes from - but it's not a strange new urban phenomenon for people to struggle with the idea of people killing and eating animals they have got to know well. It's not intrinsically stupid or unnatural. Arguably, it's more natural than farming animals for meat, if you go back far enough.
The problem is that reluctance to eat an animal with a name, and the desire to eat the unnamed 'outsider' animal leads directly to the horrors of factory farming. But I don't think that means that welfare-focussed small scale animal raising for food is, or should be, entirely uncontroversial.
Incidentally, all these surveys that say children believe cheese comes from rats and so on - does no school child get any credit for a sense of humour? I mean, imagine you are a kid being forced to complete a survey which you are told you must fill in, but crucially on which you can lie with complete impunity. I reckon it's odds-on that at least some of them are going to go through the form going "hahaha, and then I told them cheese came from rats LOL!"
Well, I would, and given the number of people who gave their Census religion as 'Jedi' I don't think I'm alone, somehow.