Particular fears were expressed over sections suggesting that pupils should not be given individual contraceptive advice, and that pupil confidences must be relayed to the headteacher or parents.
Public law specialist Michael Beloff QC said: "We do not consider that the advice in the circular seeks to impose an absolute duty to break confidences, nor indeed is the circular binding in law. Accordingly, we do not consider that a teacher is bound to follow [such] advice if in the teacher's professional judgment the child's best interests are better served by not doing so (subject to the parent's power to excuse [from sex education lessons] and the headteacher's power to direct)."
His advice supports the circular's intention that parents have the absolute power to remove their children from sex education lessons, but contradicts many of the sections which teachers felt hampered their professional duty to pupils. And while he says it is still largely down to individual teachers to respect pupil confidences - if it is in the best interests of the child - this does not apply if the headteacher has already said that he or she must be informed if any pupil may be having under-age sex or is being sexually abused.
Mr Beloff also believes that a teacher need not seek parental consent before giving a pupil counselling or advice relating to sex education - unless there is a specific instruction from the head.
His advice - based on existing laws as well as a study of teachers' statutory terms and conditions - has been welcomed by the Association of Teachers and Lecturers, which led a group, including the British Medical Association, in seeking it. ATL members will receive booklets explaining how the advice affects them.
Rachel Thomson, of the Sex Education Forum, said: "This will be a very great relief to teachers. The advice matches what they already do, sensibly."
She believed teachers could now answer individuals' questions on contraception in sex education classes and, if approached with similar queries from pupils withdrawn by their parents, could tell them where to seek advice.
Sheila Dainton, assistant general secretary of the Association of Teachers and Lecturers, said members had been particularly worried about having to pass on information about pupils.
There had also been concern about the implications in cases of sexual abuse. Circular 594 was completed earlier this year, when the furore over sexually explicit lessons was at its height after the Leeds "Mars bar" case.
This was believed in many quarters to have significantly affected its tone, although a warning in the draft version that criminal prosecutions might follow a teacher giving "contraceptive advice" was later modified.
"We know of no basis in principle or authority for suggesting that there is any legal duty on a teacher to inform a parent of matters which a child has confided to them," says the opinion, adding that a court would regard it as a matter of professional judgment for a teacher whether he or she should tell a child that information could be offered confidentially, and whether the confidence could be maintained once the secret had been told.
Moreover, a teacher who suggested that a pupil seek confidential information from an organisation such as a Brook Advisory Centre "would not in our view be providing sex education, but merely giving information as to where advice counselling (and treatment) could lawfully be obtained".
A Department for Education spokesman said that all circulars could only interpret the law. The only real test would be in court.