Independent and Catholic schools fear research papers issued by the Gonski review are favouring funding cuts to the non-government sector.

The Independent Education Union believes the reports are pushing for a new indexation model that relies on national trends rather than the costs of educating students.

Federal secretary Chris Watt said such a measure could have significant effects on the sector, including job losses and a drop in the quality of education.

Mr Watt's concerns centre on reviews of the Average Government School Recurrent Costs index, which is essentially a measure of how much it costs to educate a student in a public school.

He said the index determined funding to both sectors, with non-government schools receiving up to 70per cent of the AGSRC from the Federal Government, with other funding coming from the state government, fees and fundraising.

But Mr Watt said this system had been reviewed and the reports suggested the index should reflect wider Australian economy measures such as the Consumer Price Index and Labour Price Index.

He said these equated to an indexation of about 3per cent a year but figures showed that the real costs of educating a child increased by 5 to 6per cent in the same period.

''People often argue that CPI is not a good measure for indexation as it does not include things like rent or mortgages, so it hardly reflects the true costs of living to the general community,'' he said. ''The same concept applies to education and if you were only to fund non-government schools based on the general costs of education, rather than the real costs, the non-government sector would be 20per cent worse off.''

Mr Watt cited a report by the Allen Consulting Group, which said indexation rates should reflect costs in ''relevant sectors of the wider Australian economy'' and that ''incentives are not created for unreasonable cost increases''.

The Deloitte economics report then went on to highlight that the AGSRC indexation factor increased by 50per cent between 1998 and 2008 compared to lower increases of 35per cent in the CPI and 43per cent in the Labour Price Index.

''There aren't any direct recommendations in there but it does suggest a containment of costs ... and that has given us cause for concern,'' he said.

But the Australian Education Union has hit out at the AGSRC model as being flawed for giving too much funding to the non-government sector.

Federal president Angelo Gavrielatos labelled the index ''indefensible and unsustainable'' as it gave independent and Catholic schools more money off the back of public schools catering for more disadvantaged students.

Mr Gavrielatos said government schools catered for 77per cent of low-income families, 86per cent of indigenous students, 80per cent of disabled pupils, 72per cent of provincial students, 79per cent of students from single-parent families and 84per cent from remote areas.

''That student profile generates higher costs, costs that are not borne by the private school lobby that simply does not enrol the same student demographic,'' he said.

He also pointed to the Allen Consulting Group's report which said, ''The AGSRC has a number of limitations. It is based on the average cost of provision across government schools of vastly different characteristics and student cohorts rather than the differential cost of meeting the needs of students and schools in all sectors.''