Smith had been called up yesterday by Sven-Goran Eriksson to help solve a striker crisis ahead of Sunday's friendly international against Denmark at Old Trafford.
The timing of the striker's arrest and late call-up was criticised by PFA chief executive Gordon Taylor, who called the affair a "Whitehall farce".
"The whole process has descended into a Whitehall farce. It's not as though they didn't know about this. It's humiliating and I just wonder what the manager thinks about this," Taylor told the BBC Today programme.
"He selects his team and then the player is sent home again."
Taylor added: "This is not an unknown incident. This happened some time ago. It's as though one part of the FA doesn't know what the other is doing.
"If this is good for morale and consistent strategy then I'm a Dutchman."
Eriksson has been left with only Emile Heskey and Wayne Rooney as his fit strikers for the game. Southampton's James Beattie has now been added as Smith's replacement.
The other England players' were unhappy with the FA's dealing with Smith and speaking about the relationship between the players and the FA, chief executive Mark Palios said: "I think it's fair to say that it is extremely difficult at the moment.
"Yes the players are angry in terms of their perception of the Alan Smith affair and we are meeting them tonight to discuss it."