The merger of three schools in south Belfast could spark 'Holy Cross number two' - with racist attacks on children and their parents, claims the Council for Ethnic Minorities.
The Education Authority is examining ways to amalgamate Fane Street Primary School, off the Lisburn Road, with Blythefield in Sandy Row and Donegall Road primary in 2016.
There are 800 empty places between the three schools.
But the Northern Ireland Council for Ethnic Minorities (NICEM) has opposed the merger, saying it would present a "high security risk of racist attacks against ethnic minority and Muslim families" when parents take their children to school in the Village area.
Sixty-four per cent of pupils at Fane Street are from immigrant families, coming from 22 countries with many different religions. One third of the children are Muslim.
Referring to the 2001 loyalist pickets outside a Catholic school in north Belfast, NICEM said the merger would potentially create a "Holy Cross Primary School scenario in South Belfast".
It also believes pupils would be more vulnerable to racist bullying at school if Fane Street's multicultural demographic were "dissolved".
DUP MLA Jimmy Spratt said NICEM's comments were "deeply unhelpful and a misrepresentation of the area", adding that local people are "deeply upset" at the suggestion.
"It is important that we all use temperate language, and I feel that talk about a 'Holy Cross number two' simply serves to stigmatise an entire community unfairly and unnecessarily," he said.
"Whilst we all must stand foresquare against those who would engage in racist attacks, it is important not to level a blanket accusation on the people of Sandy Row and the Donegall Road.
"There has been a huge amount of good work undertaken to build good community relations within the area and statements which serve to divide people and increase tensions are very unhelpful."
A spokesperson for the EA said it was "sensitive to the diverse needs and issues faced by newcomer children".
"Every reasonable step will be made to be responsive to the needs of newcomer children and their families so that they have the opportunity to maximise their potential and enjoy their educational experience," the spokesperson said.