Equality groups are furious that draft proposals endorsed by equality minister Barbara Roche were changed to allow organisations with a "religious ethos" to discriminate against gay employees if their followers object to homosexuality. The original legislation only allowed discrimination where there is a "genuine occupational requirement".
This has led to fears that gay teachers, nurses, cleaners and anyone working for organisations linked to the Church, ranging from Christian bookshops through to church schools, could face discrimination.
"This is bound to make discrimination easier rather than more difficult," said Phil Greasley, project director at Lesbian and Gay Employment Rights.
David Allison, spokesman for Outrage, added: "We are fundamentally opposed to what amounts to legalised discrimination."
However, some religious charities defended the amendments. "Our basic position is that Christian organisations should be able to employ Christian people with a lifestyle that is compatible with Christian teachings," said Iain Bainbridge, spokesman for the Christian Institute.
The Government denied it had bowed to right-wing Christians. "This is a very small exemption and churches and church groups will have to demonstrate comprehensively why they are not employing someone on the basis of their sexual orientation," said a government spokeswoman.
Groups are nevertheless angry about the alterations and are mounting a joint response. Organisations, including Unison, Amicus-MSF, Stonewall, the Lesbian and Gay Christian Movement, and Lesbian and Gay Employment Rights, are meeting on 27 May to take the matter forward.
"It is very important to combine our efforts in this situation," said Sacha Deshmukh, director of parliamentary affairs at Stonewall. "It is the very opposite of a turf war."
The Government drafted the laws banning workplace discrimination on the basis of sexual orientation or religion in accordance with an EU directive that requires the changes to be brought in to domestic law by December 2003.
Groups are concerned that the widening of the exemption criteria does not reflect the aims of the EU directive. "The exemption has been extended much further than the original directive allowed," said Deshmukh.