A Melbourne school linked to the controversial Church of Scientology received $300,000 in funding from the federal stimulus package.
Yarralinda, in Mooroolbark, is one of two schools in Australia that uses the teaching methods of Scientology founder L. Ron Hubbard.
Prime Minister Kevin Rudd recently expressed concerns about the Church of Scientology after independent senator Nick Xenophon made serious claims against the organisation under parliamentary privilege.
Last week, the State Government told its schools not to distribute materials by a Scientology-funded group called Youth for Human Rights after it was revealed it organised a year 9 art prize.
Yarralinda, which boasts it is a "no homework school", says on its website it uses the Applied Scholastics method developed by Hubbard. The private school's patron is Scientologist Kate Ceberano.
Tom Cruise, a prominent church member, is a global ambassador for Applied Scholastics.
Yarralinda received $250,000 for a multi-purpose hall and $50,000 for refurbishment under the Federal Government's education stimulus package.
It will also get $340,000 over four years in federal aid for private schools and is given state government funding based on enrolment numbers.
Senator Xenophon said it was inconsistent that governments were banning Scientology-funded groups from state schools while the Federal Government was providing hundreds of thousands of dollars in stimulus money to schools directly linked to the organisation.
Yarralinda principal Christel Duffy, a Scientologist, said her school offered a broad curriculum and met all government requirements for public funding.
"Our focus is on nurturing students' natural abilities to equip them with both job skills and life skills," she said.
Church of Scientology spokeswoman Vicki Dunstan said Yarralinda was a secular school independent from the church.
