Gay students and teachers could be rejected by religious schools under changes to anti-discrimination laws being recommended by a federal review into religious freedom.
Former Liberal minister Phillip Ruddock, who chaired the review, says the right of schools to turn away gay students and teachers should be enshrined in the Sex Discrimination Act.
"To some school communities, cultivating an environment and ethos which conforms to their religious beliefs is of paramount importance," the review says, according to Fairfax Media.
"To the extent that this can be done in the context of appropriate safeguards for the rights and mental health of the child, the panel accepts their right to select, or preference, students who uphold the religious convictions of that school community."
The review was commissioned after the 2017 same-sex marriage vote and handed to the federal government five months ago.
It is still to be officially released.
Labor Deputy Leader Tanya Plibersek said her party was fundamentally opposed to increasing discrimination.
"As a human being and as a mother, the idea that adults would be discriminating against or rejecting children seems to me pretty awful," Ms Plibersek told Sky News on Wednesday.
Alex Greenwich, the NSW Independent MP who co-chaired the national campaign in support of same-sex marriage, is demanding Prime Minister Scott Morrison rule out the recommendation.
"The recommendation to increase discrimination in schools against the gay teachers and students is offensive to parents, teachers and school communities," Mr Greenwich said.
"The government should be focusing on reducing, not increasing bullying in schools".