The first minister's rejection of plans to expand Welsh-medium education in Cardiff is a "challenge to the credibility of his government", the former leader of Plaid Cymru says.
Dafydd Wigley said he was "shocked" that Carwyn Jones blocked proposals to cut surplus English-medium places and replace them with Welsh-medium ones.
The assembly government has said Cardiff council's plans were "not likely to improve the standard of education provision".
Plaid Cymru - which shares power with Labour in the Welsh Assembly Government - has called the first minister's decision an "outrage".
Cardiff council's Lib Dem leader said it would send "shockwaves" through Welsh speaking parents in the area.
The plans involve schools in the west of the city.
The local authority proposed closing Lansdowne Primary in the Canton area to make way for the expansion of Welsh-medium school Ysgol Treganna, which is short of space.
After meeting parents on Friday, Mr Wigley, the former president of Plaid Cymru, said Mr Jones's decision stopped the council from being able to fulfil its obligations in meeting demand for Welsh-medium education in the area.
He said the decision also contradicted the assembly government's Welsh-medium education strategy.
Mr Wigley said: "The only way that Carwyn Jones can dig his way out of the hole that he has created for himself by intervening in this way is to immediately provide the necessary funding in order to create a new Welsh-medium school in the area.
"This is a challenge to the credibility of the government that Carwyn Jones leads.
"I am shocked by the way that Labour have second guessed a democratic decision taken by Cardiff council. This decision has major implications for all the local authorities in Wales."
Parents of children at Lansdowne Primary mounted a strong campaign to save the school, claiming the closure would simply move the problem elsewhere, leaving English-medium schools in Canton without enough room.
Plaid Cymru councillors meanwhile say they support the council taking legal advice, while noting one possible solution could be building an English-medium primary school on the site of Fitzalan High School.
This would require £5m funding from the assembly government.
In a statement, the assembly government said: "Whilst its the local authority's responsibility to identify alternative proposals that would provide a solution which will meet the needs of all pupils in Canton, ministers have asked officials to provide whatever support that can lawfully be given to the local authority to assist them to meet that responsibility.
"We recognise that any solution must ensure decent conditions and provision for children educated through both the medium of Welsh and English in the area.
"It is important that overcrowding in any schools in the locale, should not happen as a consequence of any proposed solution."