David Cameron has said there can be no opt-out for Roman Catholic-run adoption agencies from the Sexual Orientation Regulations.

The Conservative party leader said there should be an adjustment period of three to four years for adoption agencies to allow them to adjust to the new rules, which outlaw discrimination on the grounds of sexual orientation when accessing goods and services.

“It is not right to give a block exemption for Catholics. We really need to find a compromise – a way forward can be found for everyone,” he told BBC Radio 4.

Mr Cameron accused the Prime Minister of mishandling the situation and said he would be voting for the regulations when they are laid before Parliament next month, but confirmed that Tory MPs will get a free vote.

“It is important that it is a free vote – we need more free votes in this country,” he said.

Shadow Home Secretary David Davis said yesterday that he will against any attempt to force Roman Catholic adoption agencies to comply with the regulations, and several prominent Tory MPs have backed the stance of the Catholic church.

The Conservative party supported the Equality Act when it came before Parliament last year.

The Sexual Orientation Regulations set out the practical ways in which the Act will be enforced.

Last week it emerged that Cardinal Cormac Murphy-O’Connor, the head of the Roman Catholic church in England and Wales, had written to the Prime Minister and every member of the Cabinet warning that agencies run by the church would rather close that consider gay or lesbian couples as adoptive parents.

After protests from many Labour MPs and members of his own Cabinet, Mr Blair appeared to concede that there would be no opt-outs for Catholic agencies, but on Wednesday released a statement saying that he is still trying to find a compromise solution.

The Prime Minister said a final decision will be announced this week.

Mr Cameron spoke out in favour of gay and lesbian couples as suitable adoptive parents.

He gave the example of a man and his wife being killed in an accident, and argued that it would be perfectly right for the man’s gay brother and his partner to adopt the couple’s children.

Last week Tory activists were critical of the party leadership’s silence on the issue of an exemption for Catholic adoption agencies.

The comments from Mr Cameron this morning are the first time that a shadow Cabinet member has presented a solution to the ongoing controversy.

He said that Catholic-run agencies could merge with local authority providers of adoption services, and that the religious providers should be given three or four years to make the transition, but that it was wrong for anyone to be given a block exemption from equality legislation.

Stonewall welcomed Mr Cameron’s comments on gay adpotion and the Catholic adoption agencies.

“We are delighted that Mr Cameron has kept his promise of supporting equality for gay people, and we hope this is a sign of permanent change being embedded in the Tory party,” Ben Summerskill, Stonewall chief executive, told PinkNews.co.uk.