Catholic adoption agencies should feel free to reject gay couples who apply for children, without fear of punishment from Britain's anti-discrimination laws, the church has said.

With backing from the Anglican Church, Britain's Roman Catholic leaders repeated their call Wednesday for Prime Minister Tony Blair's administration to exempt the Catholic church from Britain's new Equality Act, due to take effect in April.

Otherwise, the Catholic Church threatened it would shut down its adoption services — which process 32 per cent of all voluntary sector adoptions across Wales and England — shutting out some 4,000 children still awaiting placements.

"Catholic teaching about the foundations of family life … means that Catholic adoption agencies would not be able to recruit and consider homosexual couples as potential adoptive parents," Cardinal Cormac Murphy-O'Connor wrote in a letter to Blair.

The cardinal flipped the debate on anti-discrimination, saying that by commanding devout Catholics to "act against the teaching of the church and their own consciences," the law itself amounted to "unjust discrimination against Catholics."

Think of interests of children: official

Blair's official spokesman told reporters Tuesday "the key thing we have to remember in all of this is the interests of the children concerned, and that there are arguments on both sides."

Political analysts believe Blair is leaning towards the church's side, but approving the exemption would cause deep rifts within his Labour party.

Lord Chancellor Lord Falconer told the BBC Tuesday he did not wish to see Catholic churches close their adoption agencies, but argued that if society disapproves of discrimination against homosexuals, "you cannot give exclusions to people on the grounds that their religion or their race says, 'We don't agree with that.'"

The church now refers gay couples to other agencies that are willing to accept their application.

The dispute over the law, also known as the Sexual Orientation Regulations, is part of a broader debate in Britain about balancing regulations with religious sensitivities such as Christians wearing crosses to work, Muslim women wearing veils, or Church of England bishops sitting in the House of Lords.

With files from the Associated Press