Schools and unions say they are "horrified" at the Government giving a $11.7 million grant to an exclusive private green-focused school.
The Greens pushed for the funding despite it flying in the face of one of their core values to end public funding going to private schools.
The Opposition has called it a hypocritical and unfair "dirty little deal".
But Greens co-leader James Shaw defended the move and said by giving the Green School in Taranaki $11.7 million for their expansion project, it would promote a sustainable building, create 200 jobs and diversify the Taranaki economy away from oil and gas.
"What we've got here is a construction project that happens to be a school."
The grant for the Green School - which charges $24,000 a year for New Zealand pupils and up to $43,000 for international students - comes from the $3 billion infrastructure pot in the Covid-19 Response and Recovery Fund and was quietly announced on the Beehive website.
Shaw said the project was "shovel ready" and would allow the school to boost its roll from 120 students to 250, contributing $43 million each year for the local economy.
The promises a "holistic, student-guided approach" to inspire "young people to be green leaders".
Principals' Federation president Perry Rush said state school principals were horrified at the multi-million dollar grant to a private school when other schools were in desperate need.
"You wouldn't believe the vociferous response of principals, particularly in Taranaki, who have been writing to Government ministers with the most appalling stories of deficits in property management, classrooms that are leaking and children in halls because there is insufficient space," he said.
"Yet we have an $11m investment in a private school which most Kiwis can't afford to attend. It's an extraordinary decision."
Education union NZEI Te Riu Roa was also deeply disappointed in the funding.
Its national secretary Paul Goulter said it was especially confounding given the Greens' policy is quite clear they don't support public money going to private schools.
"We just don't see any role for public funding for private schools and in terms of the Greens, they have exactly that same policy so it certainly came out of left field."
Goulter said he didn't agree with Shaw's logic that the Green School grant was for a construction project because there were so many public schools with crumbling buildings which could have benefited from the money and created the same number of jobs.
He also questioned the logic of backing a school heavily reliant on international students at a time that sector was in dire straits.
"We would obviously like to see the funding pulled. I have a deep suspicion that's not possible at this stage."
Education Minister Chris Hipkins attempted to distance himself from the funding and said it wasn't a project he would have prioritised and was instead something the Greens had advocated for.
Because the funding hadn't come from education, Hipkins deferred questions to the ministers involved with shovel-ready projects.
National's education spokesperson Nicola Willis called the funding "scandalous" and said Hipkins' attempt to distance himself wouldn't wash.
"He is a senior Minister in the Government that signed-off on it. His job is to stick up for education priorities. He failed. It's sloppy, unfair and shows disrespect for taxpayer money."
Labour's policy is that private schools can only access small operational subsidies, out of a capped fund, of between $1000 and $2000 per student, which was also National's policy in Government, said Willis.
She called the grant a "dirty little deal" which was hypocritical and unfair.
"What is going on here? Has Labour's policy now changed? Will other private schools now be able to get similar grants for new buildings?"
Act leader David Seymour called the Greens pushing for the grant "deeply hypocritical".
"If the Greens have seen the light on educational choice, that should be welcomed, but it shouldn't be a political issue."