The row between the two men revolves around Rangers' central defender Tony Vidmar, who is ruled out of tonight's Uefa Cup match against Strasbourg as he is needed by Venables. Australia play Tunisia in a friendly the following night.
The Australian goalkeeper, Aston Villa's Mark Bosnich, is able to play for his club in the Uefa Cup against Bordeaux.
"I know Terry is entitled to call him up but I am still struggling to come to terms with it as Bosnich is allowed to play for Villa," Smith said.
"I am shocked at Walter's comments," Venables said. "I think it is a mark of disrespect to Australia to talk like that."
Rangers' other Australian defender, Craig Moore, is ruled out tonight with a broken ankle while the German midfielder Jorg Albertz is suspended. Brian Laudrup, who suffered a thigh injury against Motherwell on Saturday, has called on a Danish reflexologist in an attempt to speed up his recovery.Reuse content