Australia's largest Muslim school has been given a lifeline by the NSW Education Minister Adrian Piccoli, who has decided to maintain its accreditation for at least another 12 months, according The Australian.

The reprieve came after the NSW Board of Studies last month recommended Sydney's Malek Fahd Islamic School not to have its accreditation extended into 2014 due to concerns over financial mismanagement and other compliance breaches.

"While progress has been made in relation to the areas of the school's non-compliance with the Education Act, the board continues to have concerns about the school's compliance with the requirements for registration and accreditation," the Board of Studies said in a statement.

"Accordingly, the school's period of registration and accreditation has been extended until 31 December, 2014, during which time the school is required to address the board's concerns."