The founders of illegally-operating schools, including three closed down in Birmingham last month, could face jail after education secretary Nicky Morgan ordered inspectors to draw up legal cases against them.
Ofsted shut down three schools in Birmingham last week.
Sir Michael Wilshaw, the chief inspector of schools, disclosed the three were offering a narrow Islamic-based curriculum that included anti-Semitic, homophobic and misogynistic material.
Teaching was also taking place in conditions that represented a fire risk, he said.
Ofsted has now been told to prepare cases for prosecution against all 18 of the unregistered schools it has discovered, as well as against all future cases.
The cases will go before the education secretary, who will decide if a prosecution can be pursued.
The move follows a letter from Sir Michael to Ms Morgan calling for an "urgent" review that would ensure illegal schools are disrupted, and is part of a wider drive to stop children being exposed to extremist ideologies.
The education secretary said:
Independent schools offering full-time education in England must register with the Department for Education and accept inspection by Ofsted.
Failure to comply can lead to a jail term of up to 51 weeks and a fine.
A team of six new inspectors will be involved in identifying, investigating and supporting the prosecution of those operating unregistered schools.