Sydney Islamic school Malek Fahd has been forced to repay $9 million in NSW government funding because it was found to be transferring money to a Muslim organisation.

The NSW Minister for Education Adrian Piccoli has written to the school asking it to repay the money because it had breached requirements preventing it from operating for profit.

Mr Piccoli said the school did not receive services in return for money it gave to the Australian Federation of Islamic Councils.

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