A spokeswoman for Scientology in Germany dismissed Schaeuble's allegations as "insane".
Schaeuble and the country's 16 state interior ministers declared Scientology unconstitutional on Friday, opening the way for a possible ban on the organisation.
"Scientology is also working in Germany to secure political power and influence," Schaeuble said in an interview with Bild am Sonntag newspaper published on Sunday.
"Fundamental rights, including human rights, like the right to equal treatment and human dignity are limited or abrogated. The democratic system is rejected," he said.
Schaeuble was referring to the spiritual movement founded in 1953 by U.S. science fiction author L. Ron Hubbard.
Schaeuble and his state counterparts said Germany's domestic intelligence agencies should continue gathering information on the legality of Scientology's activities in Germany so that a decision could be made about a possible ban next year.
But German intelligence agencies have been closely monitoring Scientology's operations for a decade and see little hope of amassing sufficient evidence to justify a ban, Der Spiegel magazine reported in its latest issue.
Germany does not recognise Scientology as a religion and regard it as a cult masquerading as a church to make money.
Scientologists reject this view. They say that more than 50 court decisions in Germany had acknowledged the group as a religious community. Other countries had also recognised Scientology as a religion, the group says.
"PLANETARY RESCUE CAMPAIGN"
Bild am Sonntag also cited what it said was an internal Scientology document quoted in a German domestic intelligence report, adding the document appeared to show that the organisation has political designs in Germany.
"In order to execute our planetary rescue campaigns we must reach the highest levels of the German government in Berlin," the Bild am Sonntag quoted the document as saying.
The organisation's spokeswoman in Germany, Sabine Weber, confirmed that the quote came from Scientology. However, she said it was not from an official Scientology memorandum but an unauthorised email sent out by an unidentified person.
Weber also emailed a statement saying that "Scientology is completely apolitical and for strict separation of church and state." It said the term "rescue campaigns" referred to programmes intended to educate people about issues like drug abuse prevention and human rights.
Weber also dismissed Schaeuble's allegations that Scientology was undemocratic and curtailed human rights.
"Who dares to say we are against human rights? This is completely insane," she said.
Earlier this year, the German Defence Ministry said it would not allow the makers of a movie about an unsuccessful attempt to assassinate Hitler to film at German military sites because U.S. actor Tom Cruise, a Scientologist, was appearing in it.
The government later relented, saying its initial decision had nothing to do with Tom Cruise's personal beliefs.
