CHARITIES founded by the late Richard Pratt have suggested they could cut millions of dollars in potential funding for a public school if it moves to a new site.

Three Reservoir schools - Lakeside Secondary College, Ruthven Primary School and Merrilands College - have agreed to merge from next year at the Merrilands site.

The late businessman's charity groups Visy Cares and the Pratt Foundation - which have donated about $3 million to Lakeside Secondary College, near a Visy factory - have suggested their contributions could cease if the Department of Education fails to heed the advice of a review into the schools merger.

But the three schools and their principals have agreed to the merger, and teacher groups say Visy Care's actions show how schools are increasingly at the behest of big business.

The Victorian president of the Australian Education Union, Mary Bluett, said Visy Care's actions were a ''red flag'' highlighting the degree to which corporations could seek to influence schools.

Visy Cares and the Lakeside Secondary College council called for a review into the merger process after a Government-funded report in May recommended the new school be located at Merrilands. The review found the merger process was tainted by a ''lack of transparency''.

Stakeholders were also disappointed that issues such as the quality of education at the schools and the full impact of environmental factors were not taken into account.

Visy Cares chief executive Ian Allen said the review meant the decision to merge at Merrilands should be reconsidered.

Mr Allen said more than half of the Lakeside students lived to the south of their school, while Merrilands was in the far north of the catchment zone, meaning extra travel for the bulk of Lakeside students.

He refused to rule out cuts to future funding, as it was Visy Care's policy to support activities and schools near Visy factories.

However, Ms Bluett urged Visy to reconsider, saying that students whose parents worked at the Visy factory would still be attending the merged school, regardless of where it was.

Some Lakeside school council members have also criticised the site selection process, arguing that the schools were rushed into agreeing to a merger to obtain Government funding.