The Leeds West MP, who has been the Prime Minister's faith envoy since 2001, described the report as "quite good and balanced".
However, he said he reconsidered his decision to attend the launch because he objected to the NCVO's press material, which he claimed misrepresented the report. He said the umbrella body's press release, which emphasised the potential divisiveness of policies that treat the faith sector as separate from the rest of the voluntary and community sector, unfairly represented the Government.
"The press release and the document don't match at all," he said. "There was no point us having a discussion when we can't even agree on the premises."
He told Third Sector Online that, in his experience, faith groups themselves wanted to be treated as distinctive. "Why else would they have asked for a separate capacity fund six years ago?" he asked.
He said it would have been more appropriate for a representative of faith groups to take his place and argue the case for their distinctiveness.
The report, called Faith and Voluntary Action, calls the case for faith groups' distinctiveness as "unresolved", pointing out that many of the values and motivations cited by such groups are shared by non-faith groups.
It goes on to say that treating faith and mainstream voluntary groups as separate can lead to mutual resentment. The document reads: "Faith-based organisations are perceived as distinctive, and in turn they have often been afforded a separate role in policy development. We believe this is a problem, with the result that wider civil society and, in fact, faith-based organisations themselves feel alienated and, in some cases, excluded from policy discussions or funding arrangements."
NCVO chief executive Stuart Etherington said at the launch event that Battle had cancelled his appearance because he didn't agree with the report's conclusions. He said: "It seems the Government's faith envoy can't deal with this. I think that is inherently unwise, and I'm disappointed. Battle is not doing battle."
The NCVO press officer who wrote the press release admitted he had "picked out the most interesting elements" of the report in order to maximise press coverage of it, but denied he had misrepresented its contents.
He said: "We have discussed the report with faith group representatives and they were there at the launch. It was a useful and positive discussion."