A wealthy sponsor of three state schools in England has warned that the honours row could deter other backers and ultimately penalise needy children.
Sir Peter said he had no influence over the curriculum
Christian philanthropist Sir Peter Vardy said if the academies initiative fell, then generations would lose out.
Ex-government aide Des Smith, who once suggested academy sponsors could expect titles, has been arrested and bailed.
And Labour MP Clive Betts has urged Tony Blair to pause before any more city academies are built.
He said: "I think we should have a general pause for thought on city academies and on trust schools and let's have a debate about the accountability of our schools and how we get schools to operate collectively together for the benefit of all our children."
Academies are state schools which are independently run and listed as charitable companies.
Private sponsors have to provide £2m, but the capital and running costs are met by the state.
Sir Peter has backed two academies and a city technology college in the North East through his Emmanuel Foundation.
Anyone doing likewise in hope of an honour "should not be building schools", he told BBC Radio 4's Today programme.
"If the initiative is sunk and put below water because of this cash for honours it'll be an enormous change to the generations of young people who need a much better education than they're getting at the moment."
Sir Peter's intervention came after the arrest of a London head teacher by police investigating allegations that Labour party backers might have been promised honours.
Des Smith resigned from the Specialist School and Academies Trust after apparently suggesting academy sponsors could expect titles, in a statement to a newspaper which he later retracted.
Sir Peter set up his first school, Emmanuel College, in Gateshead, 17 years ago under the Thatcher government.
He was knighted in 2001 "for services to business and education" before he sponsored the academies. He says he has never contributed to a political party.
Sir Peter also denied he had any influence over what was taught in class.
He told the Today programme, on BBC Radio 4, he believed in "a Creator God" who could have made the earth in six days if he had wanted to, but this had no bearing on the curriculum.
On Friday, National Association of Head Teachers general secretary Mick Brookes said the whole academies programme had been put in doubt by the honours row.
National Union of Teachers leader Steve Sinnott said wealthy businessmen should not be able to exert "undue influence" over the way academies were run.
"What we will continue to oppose is people being able to peddle, in our education system, their narrow beliefs and prejudices because they are prepared to put £2m into a school," he said.