The Government could face a politically embarrassing defeat in the House of Lords over its plans to expand the grant-maintained sector, senior conservative strategists fear.
Without the support of the Anglican bishops and Roman Catholic peers, John Major's attempt to revive opting out as an election issue could backfire.
Insiders suspect the bishops, along with Catholic and Anglican peers, will combine to wreck the legislation planned for this autumn which would remove the need for church schools to ballot parents before opting out.
One of the Prime Minister's advisers on GM schools says that the diocesan boards responsible for church schools are not willing to relinquish their traditional links with local education authorities.
The churches have in the main been opposed to or neutral on the question of whether their schools should become GM. The Roman Catholic hierarchy in particular takes the moral view that GM schools take resources that could be shared among all schools. However, at least a fifth of the 1,000-plus GM schools are church schools. Gillian Shephard, the Education and Employment Secretary, has asked to meet the directors of the C of E and Catholic education services this month .
The Government already faces problems with the passage of its Bill to allow GM schools to borrow money on the open market - its tiny majority has been further reduced to seven overall with the defection of former higher education minister Alan Howarth to Labour. By combining that legislation with its controversial plans on ballots and its promise to allow GM schools to change their character it risks an important defeat.
It is the likely opposition of the churches to the ending of the ballot requirement that concerns the party managers. The early signs are that the bishops are not sympathetic and they constitute a significant voting force in the House of Lords.
The Government is now considering increasing the number of working peers. The suggestion is that an influential figure in the GM movement, possibly Sir Robert Balchin, chairman of the Government-funded GM Schools Foundation and of the private GM Schools Centre, would be useful in any battle with troublesome bishops.
The Queen's speech next month is expected to outline details of the Bill which will give new financial freedom to GM schools. That Bill could also include the planned changes on ballots and admissions in GM schools, but there is a danger that the less contentious changes to financial arrangements could be wrecked if the church-school proposals are also included. Party managers will also be concerned as both Houses will be dealing with another controversial education Bill bringing in nursery vouchers at a crucial time in the run-up to an election.
It will also force Mrs Shephard to pilot through these proposals which emanate directly from John Major. At a fringe meeting at the Conservative conference in Blackpool, she made no mention of GM schools in her speech on raising standards. However, during questions she said the Government was looking at extending the benefits of GMS to all pupils. "That is a remit the Prime Minister has given us and one that we have accepted," she said.
Ministers are still considering how to proceed with their legislative plans. But one Government source said: "We are still at the consultation process but obviously we prefer not to have three separate Bills from an administrative point of view."