The Conservative Government is to axe a cap on faith-based admissions to religious schools that restricts them to offering at most, only half their places to children of faith.

The Education Secretary, Gillian Keegan, it will encourage faith schools to expand and create more “high-quality” places for school children.

Under current rules, any new faith schools that are oversubscribed can only prioritise pupils based on faith for 50 per cent of its places.

When the cap was introduced, it was argued that it would stop the proliferation of hardline religious schools. However, ministers feel that the cap has had little impact in that regard and instead had the undesired effect of preventing Catholic schools from expanding.

The Catholic Church has argued that turning away children of faith for non-Catholic children was incompatible with canon law. The Catholic education service refused to participate in the free schools programme until the Government relented and repealed the cap.

Officials at the Department for Education believe lifting the cap will encourage Catholic schools – which are often highly sought after by parents – to set up new institutions and expand their existing provision by joining multi-academy trusts.