The Government’s senior law officer Dominic Grieve said people with “softer” religious views had been reluctant to express their faith because of the “disturbing” rise of fundamentalism.
Backing the Prime Minister’s remarks on the Church, the Attorney General said Britain was “underpinned by Christian values”.
David Cameron's assertion that Britain is a “Christian country” – which followed three separate occasions in which the Prime Minister applauded Christianity around Easter – had been met with claims that he risked sowing “alienation and division” in society.
Last weekend more than 50 writers, scientists, broadcasters and academics signed an open letter expressing concern at the “negative consequences” of the Prime Minister's assertion in a country where most people do not describe themselves as Christian.
But Mr Grieve said the authors of the letter, organised by the British Humanist Association, were “deluding themselves” and claimed that “atheism doesn't appear to have made much progress in this country.”
In an interview with the Daily Telegraph, Mr Grieve said: “The evidence is overwhelming that most people in this country by a very substantial margin have religious belief in the supernatural or a deity.
“To that extent atheism doesn't appear to have made much progress in this country at all, which is probably why the people that wrote this letter are so exercised about it.”
Mr Grieve said: “Our state, its ethics and our society are underpinned by Christian values” and added: “As I go around and look at the way we make laws, and indeed many of the underlying ethics of society are Christian based and the result of 1,500 years of Christian input into our national life.
“It is not going to disappear overnight. They (the atheists) are deluding themselves.”
In a Daily Telegraph interview Mr Grieve warned people were being discouraged from openly declaring their beliefs because of the “deep intolerance” of religious extremists of all faiths, including Islam and Christianity. He said: “I do think that there has been a rise of an assertiveness of religious groups across the spectrum. That is why those with softer religious views find it disturbing and say they don't want anything to do with it.”
According to the 2011 census, Christianity remains the largest religious group at 33.2 million, or around six in 10 of the population, but around one in four people in England and Wales now classify themselves as having no religion.
The controversy follows Mr Cameron's article last week for the Church Times in which he wrote of his own faith and his desire to infuse politics with Christian ideals and values. “I believe we should be more confident about our status as a Christian country, more ambitious about expanding the role of faith-based organisations, and, frankly, more evangelical about a faith that compels us to make a difference to people's lives,” he wrote, adding: “if we pull together, we can change the world and make it a better place.”