Embattled Sydney Islamic school Malek Fahd is unlikely to stay open once federal government funding is withdrawn, the Association of Independent Schools says.
The federal government spent $19 million on the school last year but now says it will withdraw funding over concerns about the school's financial management.
"It would be very difficult for that school to continue operating," executive director of the Association of Independent Schools of NSW, Geoff Newcombe, told AAP.
"It would put massive pressure on the school," he said.
"A school like that would be funded about 70-75 per cent of its revenue by state and commonwealth funding, and the rest would be from school fees."
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The association supports the minister's decision to revoke funding approval, but Mr Newcombe said it was an unusual move.
"It's very unusual for a school to have its funding cut like this. If there are difficulties or problems, the commonwealth often drip feeds the funding," Mr Newcombe said.
"In this case, the commonwealth has been dealing with this school for a very extended period of time.
"It has had a fairly chequered background with funding."
If the school does close, other schools in the area can accommodate the 2400 students enrolled at Malek Fahd, he said.
"There appears to be ample capacity within that area for the children to go to other Islamic schools," Mr Newcombe said.
Parents of students at Malek Fahd say they are devastated at the thought the school could close.
"Kids were crying at the news," school parent Amina Annous told AAP outside the Greenacre school on Wednesday.
"I'm really upset."
But the mother of a year 2 boy said she had hope the school would pull through despite funding cuts.
"It's not the children's fault and I have faith it'll stay open and there will be changes for the better."
