Education Minister Ruairi Quinn has announced he is to launch an investigation into how private schools are using the fees they receive.
A survey by the Irish Times revealed these establishments take in more than 120 million euros annually from parents, in addition to the 100 million euros in funding they receive from the state for teacher salaries.
Therefore, Mr Quinn authorised an audit in order to examine income and expenditure based on fee rates and the number of pupils at a facility.
"In this way the additional or discretionary income available to fee-charging schools relative to other schools can be assessed," he said.
Sources at the Department of Education say the investigation will identify private schools in financial difficulty in order to ensure their survival.
Principal of Belvedere College in Dublin Gerry Foley told the publication he is concerned the government may be focusing too heavily on private schools, which represent six per cent of Irish students.
However, he added there needs to be clarity to demonstrate how fees are used to supplement classroom resources.
Last month, the Sunday Times reported how some private schools are resorting to legal action against parents who have failed to pay their fees.