Senator Cameron told Fairfax Media on Wednesday that he was concerned that Ms Gillard spoke with the Christian lobby before the matter was discussed in caucus.

''It seems to be that there is now a fait accompli about this legislation if the reports in the press are correct and the Labor Party has missed a significant opportunity to practice the principle of the separation of church and state,'' he said.

Ms Gillard reportedly gave assurances to ACL managing director Jim Wallace that the government has ''no intention of restricting freedom of religion'' when it comes to religious organisations' legal right to discriminate against those who might offend their beliefs.

Under the draft new Human Rights and Anti-Discrimination Bill,  faith-based organisations retain the legal right to deny employment to groups such as homosexuals and transgender people and certain other classes, if it ''is necessary to avoid injury to the religious sensitivities of adherents of that religion''.

A spokesman for Ms Gillard said earlier this week it would not comment on discussions with stakeholders.

Mr Wallace told reporters on Wednesday he was ''not aware of any church or any [religious] organisation actually rejecting the employment of anyone and particularly, not the provision of services''.

Last year, 21 complaints were lodged with the Australian Human Rights Commission by people alleging they had been discriminated against at work, on the basis of their sexuality.  The commission does not break down complaints by whether the work was with a religious organisation, but commission president, Gillian Triggs, confirmed complaints had been received about religious groups. "We can and do receive complaints about discrimination in employment with faith-based organisations on the ground of sexual preference,'' she said.

Senator Cameron said he did not believe there should be ''any discrimination on the basis of sexual preference or religion or marital status''.

A Senate committee is holding an inquiry into the draft bill and public hearings are scheduled for next week.

West Australian Labor senator Louise Pratt, who sits on the Senate committee, echoed Senator Cameron's views, telling Fairfax Media that she was surprised by the position of some religious groups.

''I am surprised that religious organisations delivering services using taxpayer funds and already employing a great many lesbian and gay [people], single mums, unmarried people – and also delivering services to those people - should want to retain the right to discriminate against them. It simply doesn't make sense.''

Senator Pratt, who is a lesbian and has long history of advocating for gay and lesbian law reform, said she expected the issues would be ''actively debated'' during the public hearings.

Greens senator Sarah Hanson-Young, who also sits on the Senate committee, said it was disappointing that the Prime Minister was "again following the line that Jim Wallace and the Australian Christian Lobby want her to follow''.

Senator Hanson-Young added that it was not just Mr Wallace but ALP factions and factional powerbrokers, such as Joe de Bruyn – head of the powerful Shop, Distributive and Allied Employees' Association, and a conservative Catholic – who were influencing Ms Gillard's position.

The Greens senator said that there was still ''plenty of time'' to change the legislation before it passed the Senate.

With Bianca Hall

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