Archbishop Michael Jackson told the Irish Independent that the Constitution made provision for parents to exercise a choice to have their children attend a school "in the tradition of the faith and ethos which they hold dear".
The archbishop, who is patron of 49 denominational schools in the Anglican tradition, said this constitutional and democratic right was not in any way "designed to be a slap in the face" to people who wanted a more secular or pluralist education.
Dr Jackson said part of the difficulty was that Ireland had inherited an educational system where historically the churches had provided education for altruistic reasons and now found themselves "very much boxed in to denominational self-identity".
Ombudsman for Children, Emily Logan, in her submission to the Department of Education on draft legislation on schools' selection policies, called for the provision which allows schools to select students on the basis of religion to be removed.
She suggested that where a denominational school was oversubscribed, children who did not belong to the school's denomination were at an unfair disadvantage.
The archbishop was speaking after he launched this year's Black Santa Sit Out which aims to raise money for St Vincent de Paul, the Salvation Army, the Dublin Simon Community, Protestant Aid, Trust and the Church of Ireland Overseas Aid (Bishops' Appeal).
He said there was "an urgent need" for regulation of the charity sector in Ireland because people were confused, anxious and angry over the CRC scandal.
He said the lack of regulation of charitable fundraising meant people were concerned about making donations and what was happening to the money they give to charities.
The Black Santa appeal outside St Ann's Church on Dawson Street, Dublin, usually generates up to €25,000 annually for charity.
However, the archbishop acknowledged: "We simply don't know what kind of money will come through this year."
The appeal will continue until Christmas Eve and each day the vicar of St Ann's, Rev David Gillespie, and colleagues will collect outside the church from 10am until 6pm.