The federal and South Australian governments have frozen funding for an Islamic college in Adelaide.
The action comes after an audit into mounting complaints of financial mismanagement and fundamentalist practices at six Islamic schools across the country.
All are affiliated with the Australian Federation of Islamic Councils (AFIC) and investigations into the other schools - in Sydney, Melbourne, Brisbane, Canberra and Perth - are ongoing.
The federal education department on Thursday urged the Islamic College of South Australia to comply with financial management and governance requirements of the Australian Education Act.
Education Minister Simon Birmingham said he was committed to ensuring all taxpayer dollars were spent to benefit school students.
"This latest action does not come lightly. All schools must have effective management and accountability arrangements in place to support the best possible education outcomes for their students," he said.
The chairwoman of the school's board, Miriam Silva, said she would strive to meet the government's January 11 deadline to ensure funding was maintained.
"My commitment to full compliance with the Commonwealth funding requirements has not wavered and will not waver," she said in a statement.
SA's independent schools association has urged AFIC to give full authority to the college board, saying it was critical that the school continued to operate.
The state government, which earlier this year launched its own review of the Adelaide school, has also frozen funding.
"I'm not going to be ashamed about suspending money in the instance where we're uncertain about the quality of the governance," Education Minister Susan Close told reporters.
"It is really unfortunate and I can only say I feel for them [parents] but I can't do anything other than be very, very scrupulous about the way in which public money is spent on education."
ISLAMIC SCHOOLS UNDER INVESTIGATION
* Malek Fahd Islamic College (NSW)
* Islamic College of Canberra (ACT)
* Langford College (WA)
* Islamic College of Brisbane (QLD)
* Islamic College of Melbourne (VIC)
