St George's Headmaster Andrew Osmond said it would have major repercussions on lower decile schools.
However, Wanganui City College's Peter Kaua said he could not imagine why Ms Parata would consider this shake-up of school funding.
"Unfortunately when parents select a secondary school for their child, decile rating is and will always be the deciding factor."
And if Ms Parata was considering this, Mr Kaua said it was a good indication of how the future of education was going and that would be around performance pay for teachers.
Mr Kaua said parents needed to visit schools like his during the day to take in the "wairua" (spirit) where the staff felt safe to do their job and the students were safe, happy, and supported. "The pleasing factor of our place is the whanaungatanga - familiness - that abounds here, and the individual positive relationships that are key in the job of making a difference in a student's life.
"A City student profile is one of staying in school and supported in school to achieve in school."
Labour's education spokesman Chris Hipkins called it a "radical plan which would have the potential to rob thousands of Kiwi kids of their chance to achieve to their full potential".
"Hekia Parata's plan to introduce so-called performance funding for schools marks the most radical shake-up of our school system in a generation, and it has the potential to leave thousands of children's futures crushed in its wake."
Ms Parata said her comments were misunderstood, after the Herald on Sunday earlier reported the minister wanted to link schools' funding to their students' progress.
She said the Government had no intention of changing the decile funding system before the election, that it was not a priority at the moment, but wouldn't say when a funding review might be considered.