The government is "not on a collision course" with the Catholic Church over the proposed downgrading of its education body, the NIO has said.
Mrs Smith is seeking to "reduce the administrative burden"
Education Minister Angela Smith told the BBC there was "no threat to the Catholic ethos in schools".
The Council for Catholic Maintained Schools could be broken up as part of a sweeping review of NI administration.
The CCMS, which runs Catholic schools, is the employer of 8,500 teachers and looks after 500 schools.
The Review of Public Administration (RPA) has proposed that the body should be downgraded to an advisory role.
Mrs Smith said she was seeking to "reduce the administrative burden".
"The RPA will do that across the public sector. The announcement will be made shortly of how we don't spend too much money on administration and how that money gets to frontline services.
"That is the intention of the RPA and that is what we intend it to do."
She added: "I do not believe we are on a collision course (with the Catholic Church).
"I met the bishops last night and we discussed this last night, along with a number of issues.
"I can give them absolute reassurance, in terms of what they are concerned about, of maintaining the ethos and the character of their schools, they will not notice any difference."
CCMS chief executive Donal Flanagan said to remove their input would diminish educational standards.
"What we are saying is that our ethos adds value to children's standards," he said.
"Teachers and ethos are inextricably linked and we want the right to be able to appoint teachers who are committed to the aims of a Catholic education.
Schools say it is a threat to the ethos of Catholic education
"The government recognises, and nowadays almost everyone recognises, Catholic education adds value to the learning experiences of young children and improves their standards overall."
Widely anticipated changes to the way Northern Ireland is administered are set to be unveiled next Tuesday.
The review is the largest examination in more than 30 years of the organisation and delivery of public services in the province.
It was initiated by the devolved executive before the assembly was suspended in October 2002.
Many Catholic schools' representatives have written to the government in protest at the proposed downgrading of the CCMS.
The schools say they are concerned that it is a threat to the ethos of Catholic education.