Prime Minister Scott Morrison has expressed a clear view that no school should be allowed to turn away a student because they are gay.
Debate has erupted over a school's right to discriminate after sections of a Commonwealth review into religious protections were leaked to the media.
Mr Morrison refused to weigh into the issue on Wednesday, stating simply that "existing laws" enabled certain schools to turn students away based on their sexuality.
But when pressed during an interview on Thursday night, he admitted he was not comfortable with it.
"We do not think that children should be discriminated against," Mr Morrison told Sky.
"I don't think if someone's at a school they should be kicked out because they have a different sexuality to what might be believed to be the appropriate thing by a particular religious group."
Mr Morrison acknowledged he should have expressed his opinion on Wednesday and said he was happy to take the criticism.
The review — led by former Liberal MP Philip Ruddock — was completed five months ago but the Government has refused to release it publicly until it has been considered by Cabinet.
It was commissioned by former prime minister Malcolm Turnbull in the wake of the same-sex marriage debate, amid concerns from the conservative wing of the party about the ramifications of changing the Marriage Act.
The ABC has confirmed one recommendation would force religious schools that discriminate against students to be open and up-front about their rules and beliefs.
And they must act in the "best interests of the child".
Mr Morrison insisted the Coalition's aim was to improve the federal laws introduced by Labor, not extend them.
"We're going to protect religious freedom and we're not going to allow discrimination against children," he said.
He also pointed out that the Ruddock Review found no evidence of religious schools banning or expelling students because of their sexuality.
It is unclear exactly what the Government intends to do with the recommendations from the Ruddock Review.
Few MPs have read the report and there is a growing unease within Coalition ranks about the way the issue has been handled.
