A law to create a single education authority in Northern Ireland could lead to the formation of the "biggest quango in all of Europe", the Ulster Unionist Party (UUP) has warned.
The Northern Ireland Assembly gave the second reading to its Education Bill on Monday.
If passed, the legislation would result in the merger of five education boards. A new body, the Education and Skills Authority, would employ more than 50,000 staff and have a budget of more than Pounds 2 billion.
The education secretary, Caitriona Ruane of Sinn Fein, who drew up the Bill, has described it as the "most important education legislation in a generation".
But the the UUP, the Assembly's minority party, says it is "fatally flawed".
A senior UUP spokesman said: "We have been very supportive of a more streamlined approach, and that a country the size of Northern Ireland should have only one education authority, but we have serious problems with what is being put forward by Caitriona Ruane.
"We believe she has effectively created one of the largest quangos in all of Europe, one which will have many sub-regional departments.
"So in a sense we feel it is one step forward and two steps back."
The UUP added that individual schools and headteachers would be overwhelmed by the "strong bureaucracy" that would come with the new legislation.
Many voluntary-aided secondary schools in the province believe the move will strip them of their autonomy.
Elizabeth Dickson, principal of the Friends School, Lisburn, said: "We have been established since 1774 and have always been run by a board of governors. We are very much opposed to the creation of the Education and Skills Authority as it will mean the governors will lose their employer rights to the new authority."
The Bill is also backed by the Democratic Unionist Party, which is in a power-sharing agreement with Sinn Fein.
The supporters of the new legislation hope that it will liberate Pounds 20 million in cash, but it could also result in the loss of 460 education sector jobs.
Ms Ruane said in a statement: "The establishment of the Education and Skills Authority will lay the foundations for a new education system which recognises diversity, promotes equality and the achievement of high standards.
"It will help every school become a good school and support every learner to achieve his or her full potential."