The Prime Minister has announced that the government will not be granting an opt-out for Catholic adoption agencies from the Sexual Orientation Regulations.

Instead, the regulations regarding adoption will come into force at the end of 2008.

This means that Roman Catholic-run adoption agencies will have nearly two years to adjust to the new rules, which outlaw discrimination on the grounds of sexual orientation.

The decision is a defeat for Roman Catholic Cardinals in Scotland and England and Wales who has asked Mr Blair for an opt-out for their adoption agencies.

Prime Minister Tony Blair said: “Over the last few days I have listened to the strongly-held views on all sides on the issue of adoption agencies and the new sexual orientation regulations.

“I have heard from representatives of gay rights groups and the leaders of the Roman Catholic and Anglican churches as well as Jack McConnell, who has been making sure the Scottish perspective is heard in these discussions.

“While views obviously differ, everyone is agreed that, above all, the interests of the child and particularly the most vulnerable children must come first.

“I believe we have now found a way through that achieves this and which all reasonable people will be able to support.

“I start from a very firm foundation: there is no place in our society for discrimination.

“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.

“This will be made clear in the regulations that the Government will lay before Parliament shortly.

“In the interests of children, they will include a transition period before these regulations come fully into force at the end of 2008 for existing adoption agencies.

“This will be coupled, during this period, with a statutory duty for any adoption agency which does not process applications from same sex couples to refer them to another agency.

“I have also asked for a regular independent assessment from adoption and child welfare experts on the impact of the sexual orientation regulations on adoption in order to maintain the existing body of expertise.

“I am convinced that this is a package which has the interests of children, and particularly the most vulnerable, at its heart.

“It recognises the hugely valuable role played in adoption by charities and volunteers, including those inspired by religious faith, ensure we do not lose their expertise and services while upholding and extending the Government’s record against discrimination in all spheres.”

Angela Eagle, the only openly lesbian MP, told PinkNews.co.uk: “I am very happy that there will not be any exemptions.”

Ms Eagle, who is deputy chair of the Parliamentary Labour Party, had met Mr Blair last week with other MPs to express her concern that the Catholic agenices might be allowed to opt-out.