Phil Woolas, the minister for Local Government and Community Cohesion in the UK, told the Sunday Mirror that 24-year-old Aishah Azmi's decision to wear a veil while teaching made it impossible for her to perform her duties.
"She should be sacked. She has put herself in a position where she can't do her job," he told the newspaper.
Azmi told the BBC on Saturday that the garment, which left just her eyes exposed, had never been a problem for pupils at the Headfield Church of England Junior School in Dewsbury, West Yorkshire.
She said that students had never complained and there had never been an issue about children having difficulty in understanding her talk through the garment.
Azmi said that although she was unveiled during an interview for the job when a man was present, she would not expose her face in front of male colleagues while teaching.
The dispute over Azmi's veil is currently before an employment tribunal which is set to rule within days.
British Muslim women have taken
their messages to the streets
Woolas said Azmi's stance amounted to sex discrimination: "By insisting that she will wear the veil if men are there, she's saying 'I'll work with women, not men'. That's sexual discrimination. No headteacher could agree to that."
The issue of Muslim women wearing veils was thrust into the spotlight over a week ago when Jack Straw said that Muslim women who wore full veils, known as niqabs, made community relations difficult.
He said he would prefer that women did not wear them because they acted as a visible statement of separation and difference.
Symbol or support
Meanwhile, Peter Hain, a cabinet minister, rubbished a decision by British Airways to send home a worker for wearing a Christian cross.
BA employee Nadia Eweida had refused to cover up her cross necklace under a scarf, which the airline said contravened its policy that jewellery and religious symbols on chains should not be on display
The secretary of state for Northern Ireland told the BBC: "Frankly I think British Airway's order for her not to wear her cross is loopy."
"The problem is that the politicians and some people in the media have used this for demonisation of entire communities, which has become a very fashionable thing today"
member of the Labour Party
The airline has said items such as turbans, hijabs and bangles can be openly worn as it is not practical for staff to conceal them beneath their uniforms, but that smaller items such as crucifixes on necklaces should be concealed.
In an interview with BBC radio on Sunday, Lord Ahmed, a Labour parliamentarian said: "Let's be honest, there are people in our community who call themselves Muslims who have been threatening our national security. It is very unfortunate.
"But the problem is that the politicians and some people in the media have used this for demonisation of entire communities, which has become a very fashionable thing today."
He said Muslims were trying hard to deal with extremism and to engage in the veil debate.