The government has been accused of performing a U-turn over an amendment allowing faith schools to teach about homosexuality in line with their “religious character”.

Last week, schools secretary Ed Balls tabled an amendment to the Children, Schools and Families Bill that would allow faith schools to teach sex education “in a way that reflects the school’s religious character”.

The amendment was designed to make clear that equality requirements do not force governing bodies or heads to teach about issues such as homosexuality and contraception in a particular way.

The Catholic Education Service claims to have successfully lobbied for the amendment on its website.

Campaigners say this means faith schools will be permitted to teach that homosexuality is wrong and that contraception and abortion are sinful. Around a third of schools in England are faith schools.

Some have gone as far as to describe it as “the new Section 28′, in reference to the 1988 law which banned the “promotion” of homosexuality. It was repealed in 2003.

Chairman of the Accord Coalition, a group for inclusive education, Rabbi Dr Jonathan Romain said: “It is astonishing that the government plans to deny young people of their right to accurate, balanced PSHE [personal, social and health education] and sex and relationships education, and allow state funded schools to teach the subject from a particular religious viewpoint.”

“By taking this position, Ed Balls is implicitly condoning homophobia in schools and undermining attempts to tackle homophobic bullying. After Labour has done so much for equality, this looks like a 21st century Section 28 .”

The Pink Triangle Trust’s secretary George Broadhead agreed, saying: “By taking this position, [the government] is implicitly condoning homophobia in schools and undermining attempts to tackle homophobic bullying. This looks like another Section 28.”

Andrew Copson, the chief executive of the British Humanist Association, added: “The government has U-turned on their commitment to young people, trading children’s rights for the support of a minority religious lobby.

“We are deeply concerned that the government’s amendment effectively gives licence to faith schools to teach SRE [sex and relationships education] in ways that are homophobic, gender discriminatory and otherwise violate principles of human rights.”

Liberal Democrat shadow schools secretary David Laws said the U-turn was “serious and undesirable”.

Mr Laws added: “State-funded schools should not be free to put their own spin on sex and relationship education.

“The government should not pander in any way either to homophobia or to those who want young people kept in the dark when they are already exposed to these issues through the media well before the age of 16.”

According to the bill, schools should ensure that sex education “[is] appropriate to the ages of the pupils concerned and to their religious and cultural backgrounds”, “reflects a reasonable range of religious, cultural and other perspectives” and “emphasises the importance of both rights and responsibilities.”

A spokesman from the Department for Children, Schools and Families said that all schools would have to teach sex education when the new requirements came into law next year.

He told the Guardian: “All maintained schools will be required to teach full programmes of study in line with the principles outlined in the bill, including promoting equality and encouraging acceptance of diversity.

“Schools with a religious character will be free to express their faith and reflect the ethos of their school, but what they cannot do is suggest that their views are the only ones.”