The right of churches to decide for themselves who may attend Holy Communion is being challenged by the Charity Commission.
The Commission has refused to register a Plymouth Brethren group because its Holy Communion services are for members only.
This would have a huge impact on the group’s tax relief and would also have other implications.
Elders from the Plymouth Brethren gave evidence on the matter to a parliamentary select committee last week.
During the evidence a letter from the Commission’s head of legal services emerged claiming that churches cannot be assumed to be acting for the public good.
It said: “This decision makes it clear that there was no presumption that religion generally, or at any more specific level, is for the public benefit, even in the case of Christianity or the Church of England.”
The row, which has been going on for seven years, began after the Commission denied charitable status to one of the Brethren group’s churches in Devon.
The Christian Institute is intervening in the case in a bid to protect religious liberty for all churches.
A spokeswoman for the Commission said: “The application [by the brethren] was not accepted on the basis that we were unable to conclude that the organisation is established for the advancement of religion for public benefit within the relevant law.”
During last week’s hearing Charlie Elphicke, a Conservative MP, asked the Plymouth Brethren if they thought the Commission was “actively trying to suppress religion in the UK, particularly the Christian religion”.
The MP for Dover added: “I think they (the Commission) are committed to the suppression of religion and you are the little guys being picked on to start off a whole series of other churches who will follow you there.”