Church's Ultimatum; Cardinal Tells Premier That Catholic Adoption Agencies Will Be Shut Down If They Are Not Exempted from Gay Rights Legislation

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TONY Blair was last night facing an ultimatum from the Catholic church over new gay rights laws.

The head of the church in England wrote to the Prime Minister and all other members of the Cabinet threatening to shut down its adoption agencies unless they are exempted from Government legislation.

It marked a dramatic escalation in the row, which centres on church leaders' objections to being required to place children with gay couples.

Regulations due to come into force in England and Wales on April 6 are designed to prevent businesses discriminating against gays in the provision of goods and services.

But critics say the rules undermine freedom of religion and conscience and could have a serious impact on faith schools, charities and adoption agencies.

Last night, Cardinal Cormac Murphy- O'Connor wrote to the Prime Minister and each Cabinet minister insisting that Catholic adoption organisations must be excluded from the new rules.

The church runs almost a third of the voluntary adoption sector, finding homes for around 230 children each year.

If its agencies were suddenly disbanded, the adoption system would be thrown into chaos.

Sources close to the cardinal told the Daily Mail that 'with regret' he and other Catholic bishops had come to the view they could not continue to operate if the Government presses ahead with new rights for gay people.

'This is not brinkmanship,' the source said. 'It would be against Catholic teaching for them to place children with homosexual couples and so they could not continue as Catholic adoption agencies.' The cardinal's intervention threatens to exacerbate a growing Cabinet row over the regulations.

Communities Secretary Ruth Kelly, a member of the Catholic sect Opus Dei, and Tony Blair, whose wife Cherie and four children are members of the church, are said to be insisting on an exemption for faith groups.

They are under fierce attack from other ministers, who insist discrimination against same-sex couples should not be permitted in any walk of life.

Constitutional Affairs Secretary Lord Falconer insisted the laws should be given 'full effect' and 'apply to everybody'. Environment minister Ben Bradshaw, who is gay, said: 'This is an issue of equality.

It's exactly the same as saying you can't have a child for adoption because you're black, or because you're a woman, or because you're disabled.'

Mr Blair's official spokesman attempted to warn off Miss Kelly's critics, insisting they are on ' dangerous territory' to suggest that her religious views disqualify her from handling the issue. …