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A MELBOURNE school linked to the Church of Scientology spends among the lowest per student in Australia despite receiving thousands of dollars in government funding.

Yarralinda School in Mooroolbark has also come under fire for obscuring its affiliation with Scientology, in a flyer that spruiks the school as a "no homework school".

My School website reveals Yarralinda School spent $3727 per student in 2009, despite receiving $6171 per student in combined government funding and $4609 per student in fees.

Victoria's independent schools spend an average of $15,201 per student, while government schools spend an average $10,178 per student.

allocated to paying off debts

However, most of Yarralinda's income - $7765 per student - was allocated to paying off debts, according to My School.

A former board member at Yarralinda, Paul Schofield, who resigned in 2009, alleged the school's debt repayments were so high because the school had taken out a mortgage to lend money to the Church of Scientology for its headquarters in Ascot Vale.

"I was livid the school had been left with this debt in order to fund the Scientology building," he said.

The Australian Education Union called on the federal government to investigate the use of government funding.

"The government is providing recurrent funding for very specific purposes, and it appears this funding is not being used for the purpose of education," president Angelo Gavrielatos said.

Yarralinda principal Christel Duffy refused to comment on why the school's spending per student was so low.

"Any debt the school has is directly in relation to the school and there is no debt in relation to the Church of Scientology," she said.

Ms Duffy said the school used Applied Scholastics teaching materials based on the works of Scientology founder L. Ron Hubbard, who died in 1986. Its patron is Scientologist Kate Ceberano.

We do not teach any religion

"We do not teach any religion at Yarralinda School nor do we attempt to ask any children or their parents to join or study any religion," Ms Duffy said.

She said the school's promotional flyer included a logo indicating it is part of the Applied Scholastics network.

Mr Schofield said Applied Scholastics was a "Scientology front group".

"The name of Ron Hubbard and Scientology is absolute poison [so it is] policy to say the school has nothing to do with Scientology, which is absolute crap."

In its promotional flyer, titled "Local kids love no-homework school!", Yarralinda promotes its "official no homework policy", its "traditional phonics-based teaching methods" and its "highly personalised learning programs".

Xenophon condemned the lack of disclosure

Independent senator Nick Xenophon, who has pushed for Scientology's tax-free status to be scrapped, condemned the lack of disclosure on the flyer, questioning what the Church of Scientology has to hide from parents.

"Will federal funds in effect be used to recruit new members to the Church of Scientology, which has got a shocking record of harming individuals who get caught up in its web?" the senator asked.

A spokesman for Schools Minister Peter Garrett said: "A full briefing on these matters has been requested from the department."