London, England - Ministers paved the way for more State-funded Muslim, Sikh and Hindu schools yesterday with a pledge to remove "unnecessary barriers" to religious groups.
Ed Balls, the children's minister, said additional money would be made available to allow the hundreds of private religious schools to convert to the state sector.
It is thought the move will lead to a rise in the number of religious places for Muslim, Jewish, Sikh, Hindu, Seventh Day Adventist and Greek Orthodox children.
In a speech yesterday, Mr Balls insisted the expansion would be tempered by new rules forcing all schools to promote better race relations and understanding between religious groups.
He also pledged that officials would "root out" any school guilty of using banned admissions rules such as over-complicated application forms and interviewing pupils to discriminate against certain children.
In a further move, he said new privately-sponsored city academies run by faith groups would have to admit at least half of children from other faiths and non-believing families.
Teaching unions and secular groups branded the plans "plain madness" which would fuel social segregation.
But Rowan Williams, the Archbishop of Canterbury, rejected the idea that church schools "indoctrinate" children. "They offer not a programme of indoctrination, but the possibility of developing a greater level of community cohesion through the understanding of how faith shapes common life," he said.
"This matters for the lives of individuals, whether they are believers or not - because the failure to understand how faith operates leaves us at sea in engaging with our neighbours at local and global level."
Cardinal Cormac Murphy-O'Connor, the Roman Catholic Archbishop of Westminster, said he welcomed the "public recognition of the contribution made by faith schools to the harmony of our society".
"An ongoing partnership between the Catholic Church and the Government based on the right of Catholic parents - under the Human Rights Act - to choose a Catholic education for their children is a proven way of forming youngsters as good British citizens."
Some 7,000 of the 21,000 state schools in England are religious, with almost all linked to the Anglican and Catholic churches. The schools are popular with parents and many feature among the top of national GCSE and A-level league tables.
However, ministers say there are not enough places for children of other religions, particularly those from Muslim, Sikh and Hindu families.
It is believed that there are 376,000 Muslim children aged between five and 15, but only 1,770 attend England's seven state-funded Muslim schools. Many more pay to attend England's 115 fee-charging private Muslim schools.
A guidance document, Faith in the System, published by the Department for Children, Schools and Families yesterday, said that local councils should "remove unnecessary barriers to the creation of new faith schools" by making it easier for them to convert to the state sector.
Money will come from a mixture of local authority funds and cash direct from Whitehall.
Dr Evan Harris, the Liberal Democrat MP, said the separation of pupils on religious lines was "as unacceptable as racial discrimination and segregation and the last thing this country needs".