Free transport to 17 church schools in and around Essex is to be phased out. Parents whose children transfer to denominational secondaries from September 2004 will have to pay pound;300 per year per child to the county council towards the cost of transport.
However, parents of pupils already at such schools will not be charged.
Transport to primary schools will remain free. The authority says charging parents pound;100 per child per term could save it up to pound;1 million a year.
It made its decision last Friday despite condemnation from church leaders, many parents and heads. Leading clerics have claimed that parents may be forced into sending their children to non-denominational schools because of the cost.
The Roman Catholic Church says Essex's decision - and that of Northamptonshire which already charges up to pound;272 per child travelling to denominational and single-sex schools - could set a precedent.
"These two decisions could set a very unfortunate precedent and encourage other authorities to do the same," said Father George Stokes, RC director for education for Brentwood diocese.
"Going to denominational schools could become impossible for many children."
He said families in Essex have this week told him they are having to choose which of their children they can afford to send to Catholic schools, and that this decision will cause much hardship.
But the council said it would apply the charge to a maximum of two children per family, and there will be free travel for those on the lowest incomes.
Keith Porteous Wood, executive director of the National Secular Society, added: "Local authorities are not obliged to subsidise denominational transport. Huge savings could and should be made by eliminating these subsidies."