The Government will not push through proposals that churches argue would restrict their ability to deny jobs to gay people and transsexuals, Equality Minister Harriet Harman confirmed today.
Her remarks came days after Pope Benedict XVI warned that the Equality Bill ran contrary to "natural law" and restricted the freedom of religious communities.
The Government was defeated three times in the Lords last month as church leaders led by the Archbishop of York feared it would restrict their ability to control who they employed.
Ms Harman said a Government amendment to the Bill had only sought to "make the distinction between religious and non-religious jobs clearer".
During Commons exchanges on upcoming business, she said the amendment would not be brought back to Parliament and "the law will remain as it was".
Asked to clarify the situation by Labour former minister Kitty Ussher (Burnley), Ms Harman said: "The Government's policy is clear and has not changed.
"Our view is and remains that when it comes to religious organisations employing people they should comply with the law that applies with all other employers - whether it's the requirement to have written contracts, to pay sick pay or to pay the minimum wage and not to sack people unfairly or to discriminate against them."
She said "specifically religious" work was exempt from the non-discriminatory laws.
"So a religion can't discriminate against gay people or women when they hire a bookkeeper but they can when they are choosing a minister of their religion," she said.
"The amendment which we moved in the House of Lords did not and was not intended to change that policy position; what it sought to do was make the distinction between religious and non-religious jobs clearer.
"The Lords didn't regard that amendment as helpful; we'll therefore leave the law as it is and not bring back the amendment to this house.
"The law will remain as it was - there is an exemption for religious jobs but not for non-religious jobs when it comes to anti-discrimination law."
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