Six Midland independent schools are among 50 nationwide fined a total of #500,000 yesterday after being found guilty of illegal price-fixing of fees.
The schools will also have to contribute tens of thousands of pounds more to a #3 million charitable fund for pupils in the first case of its kind.
One of the Midland schools involved, Malvern College in Worcestershire, last night described the fines, levied by the Office for Fair Trading, as a "farce".
The five other regional schools are: Rugby School, Bromsgrove School, Shrewsbury School, Cheltenham College and Cheltenham Ladies College.
The penalties follow a major investigation by the OFT which in May ruled they had illegally exchanged detailed information on fees.
Each must now pay #10,000, apart from Malvern College and Cheltenham Ladies' College which received reduced fines for co-operating with the OFT investigation.
It is the first time the watchdog has penalised organisations with charity status and the action was being interpreted as a signal that charitable organisations were not exempt from the law.
David Gunn, spokesman for Malvern College, said: "The whole thing is a farce because nobody has ever attempted to prove that fees rose further than they might otherwise have done if this hadn't taken place.
"As soon as the whole thing was brought to our attention, the schools stopped having these discussions. The investigation has been a tremendous waste of taxpayers' money."
OFT found the schools exchanged confidential information relating to intended fee levels for boarding and day pupils through a survey known as the "Sevenoaks Survey".
John Fingleton, chief executive of the OFT, said: "The penalties imposed on the schools and the contributions that they will make to the charitable trust, represent a fair and proportionate outcome to this case, given the parties' charitable status and their acceptance that there has been a competition law infringement."
John Claughton, headmaster of Birmingham's fee-paying King Edward's School, which was not part of the investigation, said those schools caught out had acted innocently.
"The law was brought in and the schools were never consulted. It never occurred to us we would fall into its clutches."
Independent schools have come under fire in recent years in the wake of an average fee rise of 43 per cent since 2000 within the sector. Boarders currently pay #24,102 a year at Malvern College, #23,835 at Rugby School and #23,280 at Cheltenham College.