The Catholic Church has lost its bid to be exempted from new gay rights laws in the UK.

The news came in a statement from Prime Minister Tony Blair which addressed demands by religious groups that their adoption agencies not be governed by the Sexual Orientation Regulations.

The law aims to ensure that gays and lesbians are not discriminated in the provision of goods and services. The Catholic Church had threatened to close its adoption services if it was forced to allow gay couples to adopt.

In his statement, Blair said that, “”I start from a very firm foundation: there is no place in our society for discrimination.

“That is why I support the right of gay couples to apply to adopt like any other couple.

“And that is why there can be no exemptions for faith-based adoption agencies offering publicly-funded services from regulations which prevent discrimination.

“This will be made clear in the regulations that the Government will lay before Parliament shortly.”

He has however granted a transition period before the regulations come fully into force at the end of 2008 for existing adoption agencies. During this period, any adoption agency which does not process applications from same sex couples will have to refer them to another agency that does.

He also said that he has asked for a regular independent assessment from adoption and child welfare experts on the impact of the sexual orientation regulations on adoption “in order to maintain the existing body of expertise.”

Blair added that. “I am convinced that this is a package which has the interests of children, and particularly the most vulnerable, at its heart. It recognises the hugely valuable role played in adoption by charities and volunteers, including those inspired by religious faith, and ensures we do not lose their expertise and services while upholding and extending the Government’s record against discrimination in all spheres.”

The Roman Catholic Church responded with a statement by Cardinal Murphy-O’Connor: “We are, of course, deeply disappointed that no exemption will be granted to our agencies on the grounds of widely-held religious conviction and conscience.”

In a conciliatory gesture he said that, “We note and welcome, however, the Government’s desire that the excellent work of our agencies is not lost.”

The Sexual Orientation Regulations law must still be passed by parliament when it goes before the legislature next month, although it is expected to pass. Labour MPs will have to vote according to Blair’s stance on the matter and will not have a free vote.

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