The Sexual Orientation Regulations 2007 outlaw discrimination on the grounds of sexual orientation in the provision of goods, facilities and services, including adoption.
Roman Catholic agencies were given a two-year window in which to comply with the new rules, which runs out at the end of this year.
So far five of the eleven agencies in England and Wales have decided to leave the control of the Church. One has decided to stop working in adoption.
The Catholic Children's Society of the Archdiocese of Westminster had asked the Charity Commission if it could change its charitable objects.
“Objects” describe and identify the purpose for which the charity was set up.
Jim Richards, the agency director, told the Catholic Herald:
"We have got an answer and the answer is 'no'. They have turned down the request.
"We will now have to consider our next step based on that decision. It is quite a lengthy letter and we want our solicitors to look at it before we decide what to do. It is a decision for our trustees.
"We don't want to rush things, we have to proceed with due deliberation.
"There are still avenues to explore and objective decisions to be made. We will have to look at all this in the clear light of day
“Underlining all this, of course, is our wish to continue as a Catholic agency within the diocese carrying out the teaching of the Church. That is the wish of the trustees."
Catholic adoption agencies in Leeds and Birmingham also hoped to take advantage of a clause in the SORs by changing their objects to state the explicitly Catholic nature of their work.
Regulation 18 states:
“It is lawful for a charity to provide benefits only to persons of a particular sexual orientation if the charity is established to provide a benefit to that particular group because of their sexual orientation and the charity is acting in accordance with the charitable instrument.”
Regulation 18 protects charities that promote lesbian, gay or bisexual rights or provide counselling services for LGB people.
The church agencies planned to change their objects to state they only adopt children to heterosexual couples or single people and claim an exemption under Regulation 18.
Lancashire-based Catholic Caring Services (CCS), said they wanted to comply with the Sexual Orientation Regulations and have been threatened with eviction by the local bishop.
England's largest Roman Catholic-run adoption agency decided to consider same-sex couples as potential parents in July.
However, the Catholic Children’s Society of Arundel and Brighton, Portsmouth and Southwark's chief executive claimed that gay and lesbian couples "will not get very far" if they apply.
"We offer our services to all, irrespective of religious or ethnic origin," the group claims on its website.
Chief executive Terry Connor told Catholic newspaper The Universe that local bishops had backed the plans to allow same-sex couples to apply for adoption, but made clear that prejudice remains.
"I suspect if a same-sex couple arrives at any of the agencies just to test out the system, they will not get very far," he said.
"There are bishops who are taking the legal route about this, but ours are not. It remains to be seen whether that would result in more difficulties for their agencies."
The government briefly considered an opt out for Roman Catholic adoption agencies.
After meeting with MPs and the Cabinet in January 2007, former Prime Minister Tony Blair bowed to strong criticism from his own party over the exemption.
"I start from a very firm foundation: there is no place in our society for discrimination," Mr Blair said.
"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."
In Scotland, First Minister Alex Salmond has said he wants Church adoption agencies to remain open.
However, the SNP leader has not proposed any concrete solutions. The Scottish Parliament has legal powers over adoption, but not equality legislation.
When the Church's two year period of exemption from the SORs comes to an end on January 1st 2009, any Roman Catholic adoption agency that turns away a gay or lesbian couple on the grounds of their sexual orientation could face legal action.
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(Source: CCN)