Church leaders have accused the Government of giving preferential treatment to the Muslim community because of “political correctness”.
Parishes are being starved of state funds to help the poor as a result of money being diverted to other faiths, senior clergy told the General Synod, which is meeting in York.
A report endorsed by Dr John Sentamu, the Archbishop of York, claimed that the Government had become “unbalanced” in its approach to faith groups.
It argued that the determination of ministers to tackle Islamic extremism in the wake of the London bombings on July 7, 2005, had led to a preoccupation with Muslim communities at the expense of Christian groups.
Subsequently, the report said, churches are facing a challenge to maintain their presence in poor parts of the country.
The report’s co-author, the Rt Rev Stephen Lowe, Bishop for Urban Life and Faith, said that the Church of England had applied to the Department of Communities and Local Government for money to “enable us to support parishes”.
“It seems as if political correctness by Government may defeat us,” he said, adding that the Church was ideally placed to help improve social cohesion.
Archbishop Sentamu, who wrote the foreword to the report, What Makes a Good City, told the Synod on Saturday that it was important that Bishop Lowe had “not been shy of saying things to the Government”.
“The Church has listened to his trumpet call,” he added.
The report says that there is a “great deal of inconsistency in the way individual [Government] ministers deal with religious groups”.
It continues: “Christian groups in particular have suffered irrational prejudice against their funding applications and a lack of understanding of the nature and sometimes fragility of the local church.
“There is a perception, perhaps justified, that it has been easier for Islamic groups to receive financial support than other faith groups.”
Bishop Lowe claims that there have been numerous examples of local authorities inviting consultation with local faith groups and failing to invite any Christians.
“There can be little doubt that the terrorism agenda has seriously unbalanced government relationships with the faith communities,” the report says.
“Ministers are left to pronounce from a position of ignorance at best, or prejudice at worst.
“Ministers and civil servants see their priorities focused on dealing with Islamic extremism and treating all the faith communities in an even handed way despite relative differences in size.”
Philip Giddings, chairman of the Church’s mission and public affairs division, expressed concern over the Government’s attitude to faith groups.
“We have a huge challenge in sharing our work and vision with political leaders who do not share the same values and faith,” he said.
“They are ignorant of it and we must shift the perception of the contribution made by the Church in building a better community.”
Bishop Lowe said that the Church was committed to providing welfare to some of the most deprived and impoverished areas of the country.
“We must not become a comfortable Church for a comfortable nation, but a church totally committed to its continued presence in uncomfortable England,” he said.
The Church published a report called Faithful Cities in 2006, which was critical of Labour’s social policies.
Dr Rowan Williams, the Archbishop of Canterbury, said at the time that whilst people had got richer over the previous two decades, the period had also seen “fear, racial tension and the tendency to treat neighbours as strangers”.