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Thousands of religious schools, charities and organisations could face legal action if they refuse to employ atheists or sack staff who become Satanists under proposed Government regulations.
The laws, which are based on a European Union directive and which have to be implemented by December, ban discrimination in the workplace on the grounds of religion, belief or sexual orientation.
But a report from the Christian Institute says the laws will restrict the freedom of religious organisations to employ solely staff who are practising believers.
Christian groups are particularly angry that the Government has chosen to exempt political parties from the laws, so that the Labour Party will be able to continue its policy of employing only party members.