The British Government has overturned a 60-year old rule which required churches to contribute towards all school building costs by pledging approximately £500m to rebuild every faith-based secondary school in England.

The decision was made by Education Secretary, Ruth Kelly – who is also a Catholic. It is the first major concession to faith schools made by her. This step has infuriated secular groups who claim that taxpayers’ money should not be used to fund selective, church-based education.

Chancellor Gordon Brown had previously announced that every secondary school in the country would be rebuilt by 2015 under a £5bn refurbishment programme. Under existing rules, this would mean that the 500 voluntary-aided church schools in the country would have to contribute to 10 percent of the total cost.

But representatives of the Anglican and Catholic churches protested that they would not have enough money to fund such a programme. As a result, Ms Kelly agreed to waive the rule in a deal to treat faith schools the same as the rest of the schools.

But Marilyn Mason, education officer of the British Humanist Association, said she was "annoyed" by the deal. "The BHA is opposed to faith-based schools in principle and one of our grievances is that they're not open to all pupils," she said. "If you don't happen to be of the right faith, you can't get your children into these schools. If they obeyed the same rules as other schools with the same admissions and employment arrangements, then the situation might be different."

The current proposal would benefit 350 Roman Catholic schools, 130 Anglican schools, 23 schools ran by Christians groups, five Jewish schools, two Muslims schools, and one Sikh school.

During the election campaign, Mr Brown had also announced plans to rebuild half the country’s primary schools under a separate programme. Officials had also signalled the Government could waive the 10 percent rule for the 3.800 church primary schools.

As a result of the deal, ministers would reduce the capital grant made to church schools for other urgent repairs by £17m.

A spokeswoman for the Department for Education said, "All pupils deserve 21st-century facilities and the decision to include the voluntary-aided sector equally ensures we will deliver on that commitment."

In the past, Mr Tony Blair and Ms Kelly have always given their support to faith schools by trying to encourage church groups to back a programme to set up 200 privately sponsored academies to replace secondary schools struggling in inner cities.