Under the assisted places scheme, 50 schools in England each received more than pounds 500,000 last year, according to Department for Education figures.
Four schools - Dulwich College and Latymer Upper School in London, Newcastle under Lyme School and St Edward's College, Liverpool - each benefited by more than pounds 1m from the scheme which assists families on low incomes with fees. Some of this income - a third on average - is parental contributions.
Mr Byers, former leader of the Council of Local Education Authorities, said: 'To call these schools independent is a complete misnomer. The reality is they are totally dependent on the state.'
The pounds 85m assisted places scheme is expected to subsidise 32,000 places this year. Mr Byers said: 'This is money that should be used for the benefit of all our children, not just a few.'
The Independent Schools Information Service rejected the claims: 'For most schools the loss of the assisted places scheme would be a social disaster but not a financial disaster,' a spokesman said. 'The scheme subsidises low income families, not schools.'