What is this?

Ellie1999

Took this photo two days ago. The big green plant in the middle is my cactus that I started growing a month or so ago, buy what is growing next to it? 
I didn't think anything of it at first, but I had another look today, and they had grown, and as soon as I pulled the propagation bag off them, they all pushed something out into the air? Defence technique or spores or something, I don't know. None of the other cacti are growing anything next to them. 
Would like to know as things like this confuse me. I would appreciate any input that anyone may have, thank you.

Alan Clark2 in Liverpool

Hard to tell from the photo but they look like baby Lithops!

BobTheGardener

They are the fruiting bodies of a fungus, as you suspect.  The fungus is breaking down woody matter in the compost (and, in this case also in the pots) but won't harm your seedlings.  I found either fungii or moulds always appeared whenever I used peat pots, so no longer use them.

Ellie1999

That's what I was thinking, especially as they were initially planted in a "propagation tank", so it was warm and damp. Are the spores harmful? I felt a bit light headed after they sprayed into the air, but didn't know if that was just my brain playing tricks on me, as things like that freak me out anyway

BobTheGardener

The spores may well be harmful to us.  Many fungal spores can cause or aggravate all sorts of illnesses such as asthma, for example.

My advice would be to re-pot the seedlings into terracotta pots if you can afford them, or plastic if not, and would do it outside, keeping yourself upwind.  Chuck the peat pots on the compost heap or in the waste bin.  I'm not a cactus expert, but I believe using special cactus compost will help when you re-pot them (unless you are already using it.)

Ellie1999

Will do that, have got some small plastic pots and cactus soil also, thank you very much for your help and advice