The extent to which faith schools can "discriminate" against teachers on religious grounds has come under fire as the Government considers proposed equality legislation.
Voluntary-aided faith schools have the right to reserve certain positions for followers of their religions.
They can also take disciplinary action against staff, including dismissal, if their behaviour is "incompatible" with the faith.
Baroness Turner of Camden last week attempted to amend the law while debating the Equality Bill in the House of Lords, warning that faith schools enjoy more power to discriminate than charities or businesses with a religious ethos.
The current situation is also in breach of European Union laws that ban employment discrimination on the grounds of religion, age or sexuality, she said.
"The bill, if unamended, allows discrimination against a large category of employees; namely, all teachers in most faith schools," Baroness Turner said.
While religious charities have to show that discrimination on religious grounds is "legitimate" and "proportionate", voluntary-aided faith schools do not have the same restrictions.
Baroness Turner's comments won widespread backing from teachers' leaders and secular campaigners.
Mary Bousted, general secretary of the Association of Teachers and Lecturers and a member of the Accord coalition for inclusive school admissions, said: "The current exemption means that a PE or maths teacher in a state-funded faith school can be discriminated against to a greater extent than the CEO of a religious charity.
"That is a ludicrous situation that no-one should support, whatever their view on faith schools in principle."
Christine Blower, NUT general secretary, said: "There is no good reason why teachers should not enjoy the same protection as others who work in organisations with a religious ethos.
"It is not too much to ask that schools should have to justify discrimination against staff."
However, speaking for the Government, Baroness Thornton rejected Baroness Turner's amendments.
She said that schools could only "take regard" of teachers' behaviour when it broke with the tenets of the religion and that on its own such behaviour may be insufficient to justify disciplinary action.
The Lords debate came as it emerged that guidance from the National Society for Promoting Religious Education, which campaigns for Church of England schools, has recommended that all headteacher jobs in voluntary-controlled schools are reserved for followers of the faith.
National Secular Society head Keith Porteous Wood said: "The career paths of hundreds of teachers who were expecting promotion potentially lie in tatters because of the doctrinaire attitude of the CofE.
"Many of those teachers came to work in church schools when their religion was of little or no interest."
A CofE spokesman said the appointment of heads was a matter for governing bodies, but added: "It is entirely reasonable that the most senior leader within CofE schools should be a Christian."
FAITH IN FIGURES
- There are over 20,000 maintained schools in England, of which almost 7,000 are faith schools.
- Around 68 per cent of maintained faith schools are Church of England and 30 per cent are Catholic. All but 58 of the maintained faith schools are associated with the major Christian denominations.