The Rudd Government is handing more than $70 million to schools run by the Exclusive Brethren, a religious sect Kevin Rudd described as an "extremist cult" that breaks up families.
The sect's schools have secured more than $8.4m under the Government's school building stimulus package and they will share in $62m in recurrent taxpayer funding.
Documents show a Brethren-run school at Swan Hill in northern Victoria was granted $1.2m for a library and $800,000 for a hall when its most recent annual report shows it had just 16 pupils and already had a library.
Grants data released by the commonwealth shows that Brethren schools in every state received funding under the $12.4 billion schools stimulus package.
Despite the Brethren's past disdain for computers, figures show its schools have received more than 300 under the commonwealth computers-in-school initiative.
Brethren schools have also secured grants under the Schools Pride program. All up, the 2400 children in Brethren schools will each receive the equivalent of $26,127 in recurrent funding and $11,200 in stimulus funding.
Australian Education Union federal president Angelo Gavrielatos said these sums were outrageous and the funding system had to be urgently replaced.
"How can the Government justify handing tens of millions of dollars to an organisation it believes is a cult while public schools which educate the vast majority of our children are struggling for funds?" Mr Gavrielatos said.
"The Government has said it will review schools funding this year. That review needs to be begin as a matter of urgency to allow for a proper public debate on where school funding should be directed and for what purpose."
The Brethren is a fundamentalist Christian sect that lives by the doctrine of separation from mainstream society.
Brethren schools must teach the normal curriculum, although reports say some novels are banned and chapters on sex and reproduction are excised from science textbooks.
Brethren members are taught to shun broader society. They do not use TV, radios and do not watch movies or eat in restaurants. They do not vote, are opposed to unions and other forms of association, except their own church.
The Brethren has been accused by former members, and the Prime Minister in his 2007 comments, of denying those who leave access to their children, a claim the organisation denies.
Doug Burgess, the head of the Brethren's Victorian schools, said its schools were growing rapidly and the funding reflected that.
He defended the sect's right to school funding, saying the children would otherwise be enrolled in state schools at full taxpayers' expense.
Mr Burgess did not clarify whether sex education was taught at Brethren schools, but said textbooks were used according to state curriculum.
A spokeswoman for Education Minister Julia Gillard said independent schools' funding would be reviewed this year but declined to address the conflict between Mr Rudd's comments and the funding of Brethren schools.
The spokeswoman said Brethren schools met criteria for funding and policy allowed for flexibility on teaching sex education.
