In a historic address to Westminster today, the Pope said religion had a “legitimate” role to play in the public square and condemned attempts to exclude faith from public life.

He warned that social consensus alone could not be allowed to determine the moral principles underpinning the democratic process, as he called for dialogue between faith and reason.

“Religion is not a problem for legislators to solve, but a vital contributor to the national conversation,” he said.

“In this light, I cannot but voice my concern at the increasing marginalisation of religion, particularly Christianity, that is taking place in some quarters, even in nations which place a great emphasis on tolerance.

“There are those who would advocate that the voice of religion be silenced, or at least relegated to the purely private sphere.”

The Pope went on to dismiss the notion that Christian festivals should be celebrated without any reference to the Christian faith, as some councils in Britain have attempted to do in recent years, and called for that dialogue at every level of national life.

“There are those who argue that the public celebration of festivals such as Christmas should be discouraged, in the questionable belief that it might somehow offend those of other religions or none,” he said.

“And there are those who argue – paradoxically with the intention of eliminating discrimination – that Christians in public roles should be required at times to act against their conscience.

“These worrying signs of a failure to appreciate not only the rights of believers to freedom of conscience and freedom of religion, but also the legitimate role of religion in the public square.

“I would invite all of you, therefore, within your respective spheres of influence, to seek ways of promoting and encouraging dialogue between faith and reason at every level of national life.”

Among those in the audience were Deputy Prime Minister Nick Clegg and the four living former prime ministers.

The Pope said each generation needed to ask anew about the requirements a government can reasonably impose upon citizens and how moral dilemmas should be solved.

He admitted that “distorted” manifestations of religion, such as sectarianism and fundamentalism, had made the “purifying” and “corrective” role of religion in political debate sometimes unwelcome, but warned that the total exclusion of religion from public debate could leave reason and ideology vulnerable to similar distortions that fail to take full account of the dignity of each individual.

“That is why I would suggest that the world of reason and the world of faith – the world of secular rationality and the world of religious belief – need one another and should not be afraid to enter into a profound and ongoing dialogue, for the good of our civilisation,” he said.

The Pope touched on other issues in his speech to senior church leaders and politicians in the historic Westminster Hall.

He blamed the global financial crisis on the lack of a “solid ethical foundation”, saying that the crisis had exposed the “inadequacy of pragmatic, short-term solutions to complex social and ethical problems”.

He welcomed the Government’s pledge to commit 0.7% of national income to aid and development by 2013, saying that it had been encouraging to witness the “positive signs of a worldwide growth in solidarity towards the poor”.

He added that the commitment needed to be followed up with "fresh thinking" on how to improve other areas, such as food production, employment and the provision of clean water, education and healthcare.

“Where human lives are concerned, time is always short: yet the world has witnessed the vast resources that governments can draw upon to rescue financial institutions deemed ‘too big to fail’,” he noted.

“Surely the integral human development of the world’s peoples is no less important: here is an enterprise, worthy of the world’s attention, that is truly ‘too big to fail’.”

The Pope went out in his Popemobile again to greet the thousands of pilgrims waiting outside the Houses of Parliament to see him, despite the discovery of a suspected plot to attack him. Six men have been arrested in connection with the plot.

There were largely cheers but also some boos by protestors standing amongst the pilgrims.

The Pope smiled and waved and there were more cheers from the crowds as he stopped to kiss another baby on his way to Westminster Abbey, where he held a joint service with the Archbishop of Canterbury and Christian leaders.