Speaking during the Second Reading debate on the education Bill in the Lords, the former Tory education secretary said the proposed expansion of faith schools could encourage segregated communities. "Is not that how the troubles in Northern Ireland started?" he asked.
But there was an easy way to make faith schools inclusive, he said: ensure they had voluntary-controlled status. VC schools must follow local authority admissions procedure, while the governing bodies - and thus admissions policies - of voluntary-aided schools are controlled by religious groups.
Lord Baker also advocated the use of special schools for unruly five to eight-year-olds to nip behaviour problems in the bud. They could return to mainstream schools once they had learnt "the lessons of integration".
There was much criticism of the way the Bill centralises power. Baroness Blatch, Conservative education spokeswoman in the Lords, said: "Any education statute - past, present or future - could be altered or swept away by order of the Secretary of State."
Baroness Sharp of Guildford, for the Liberal Democrats, ridiculed the Bill's Soviet-style attempt to promote innovation through regulation. It was a case of "Please Miss, may I have permission to innovate?" she said.
Former curriculum chief Lord Dearing said the Bill focused too much on freeing successful schools. "Is not the real problem the schools where the system is not working?" he asked.
"Do not they need to be freed up to offer an education that is apt for those children?"