The challenge to the program was the second brought by Queensland father Ron Williams, who argued there was no place for religious programs in public schools.

The High Court upheld his initial challenge against the program in 2012 but the previous Labor government passed legislation to keep it going.

Comment: Chaplaincy program has no place in state schools

First introduced by the Howard government, funding was set to run out at the end of the year but a further $245 million was allocated in the recent federal budget to continue the program for the next four years. This new funding only applies to chaplains and not secular counsellors.

In the Illawarra 25 schools receive funding, including five independent schools, four Catholic schools and 16 public schools. Of these, 17 employ a chaplain, including Woonona High School.

Principal Belinda Wall said she never had the expectation the school was guaranteed the position each year as it was dependent on funding.

She said Woonona's chaplain had immersed herself in the school as part of its welfare team and had been a valuable resource for the students.

"The programs she offers here are part of the suite of options we have available to students. It's not a religious-based program, it's more in terms of supporting young people in building resilience, self-esteem and dealing with bullying and friendships and relationships. Those programs are vetted by the school."

Anousha Zarkesh, an ethics teacher at Austinmer Public School and member of lobby group Parents4Ethics, said she agreed with the decision, particularly as funding for the program was only for religious-based workers from 2015.

"I would suggest the chaplaincy program is redundant and ineffectual in a state school and we need trained psychologists dealing with our children's issues as opposed to chaplains," she said.

Prime Minister Tony Abbott said the government would continue to back the program.

The national school chaplaincy program will continue despite the High Court ruling its federal funding is unlawful.

Five High Court justices unanimously ruled on Thursday that laws designed to give a legal basis for the chaplaincy funding were invalid and that the government had no executive power to fund the agreement with Scripture Union Queensland.

Prime Minister Tony Abbott said the government would consider the impact of the judgment, but a way would be found to continue funding chaplains.

‘‘This is a policy that was invented by the Coalition, so we very much support it and we want it to continue,’’ he said.

Labor also went to the 2013 election pledging funding for the chaplaincy program but broadened it to cover secular student welfare officers.

Opposition finance spokesman Tony Burke said the government should ensure the services continue. ‘‘Labor is prepared to offer bipartisan support on this issue to ensure the continuity of commonwealth government programs,’’ Mr Burke said.

The National School Chaplaincy Association said the  government could direct money for chaplains via the states.

Liberal MP Andrew Laming, who convinced John Howard to start the program eight years ago,  took a swipe at what he called the ‘‘loose alliance of Greens, gays and atheists’’ who   campaigned against chaplaincy.   AAP