Chancellor George Osborne has claimed plans for the UK's first "gay" school in Manchester would not help tackle homophobic bullying in school classrooms.
LGBT Youth North West revealed plans on 15 January for the country's first school for gay, lesbian and transgender children.
But Osborne, also the MP for Tatton, said opening a LGBT school was not the answer to tackling homophobia.
"I think the best solution to this challenge, and I accept there is a challenge with homophobic bullying, is to make sure we get rid of the bullying rather than feeling we have to take kids out of our schools and teach then somewhere else. That would be the best approach," he told the Manchester Evening News.
He added pupils should not feel they have to move school based on their sexuality and that the government was ploughing money into "proper lessons in tolerance and learning about diversity in our community".
LGBT Youth North West, which is based off Oxford Road, is exploring the possibility of offering an alternative education for children and said it is at "very early consultation stages".
It has received a £63,000 grant from the city council to run the LGBT Centre in Manchester on behalf of the LGBT community and has said the school would be "inclusive" and not just for gay, lesbian or transgender students.
On its website, the group said: "If young LGBT people tell us they want an LGBT inclusive school, we will explore this."
Reports claimed the school would be for pupils who have been bullied in education over their sexuality.