Mr Smith expressed concern over "powerful" sects
"Fringe" religious groups could be allowed to set up their own state-funded schools under planned reforms to the secondary school sector, a teachers' union warned.
Incentives for more single-faith schools, announced by the government earlier this year, could "throw up some thorny issues" over which religious groups should qualify for state support, says the Association of Teachers and Lecturers.
Who is to decide between a mainstream non-Christian faith which is entitled to be considered and a heavily-bankrolled fringe religion?
Peter Smith, ATL General Secretary, Peter Smith, told delegates at the union's annual conference in Torquay that plans in the government's Green Paper on secondary education needed careful thought before they were passed in legislation.
While it was right that state funding for schools was being extended beyond the Anglican, Roman Catholic and Jewish faiths, he warned of arguments ahead over whether religious groups such as the Moonies or Scientologists should be subsidised by the state.
"The intellectual argument in favour of extending the provision of voluntary-aided schools to other faiths is unanswerable," Mr Smith said.
"The issue on which we will really have to concentrate is will the Green Paper proposals open the way for financially powerful cults such as the Scientologists or the Moonies to apply for public funding?
"Who is to decide between a mainstream non-Christian faith which is entitled to be considered and a heavily-bankrolled fringe religion?"
'Insulting'
But a senior government source dismissed Mr Smith's comments as offensive to the millions of parents who sent - or wanted to send - their children to church and other faith schools.
"The supposed threat he's talking about doesn't exist - there is no more chance of a Scientology or Moonie school being established now or in the future than there was in 1944," the source said.
At present, along with Anglican, Roman Catholic and Jewish schools, there are state-funded Islamic, Sikh and Greek Orthodox schools.
The government, in its proposed overhaul of the secondary school system, has called for more schools affiliated to religions, as they have proved more successful than their mainstream counterparts.
This increase in diversity was proposed in February alongside plans to expand the number of specialist schools.