The National Secular Society has expressed its dismay that a Scottish Catholic adoption agency can continue to discriminate against same-sex couples.

St Margaret’s Children and Family Care Society, based in Glasgow, had been told in January 2013 by the Office of the Scottish Charity Regulator (OSCR) that it was to lose its status over its refusal to place children with same-sex couples.

But the ruling was overturned by the Scottish Charity Appeals Panel (SCAP) last month.

The OSCR announced on Monday that it would not be appealing the ruling in favour of the charity.

Its decision not to appeal was based on the fact that an appeal would be expensive, unlikely to succeed and have limited wider implications, especially given the recent passing of equal marriage legislation in Scotland.

The new ruling leaves St Margaret’s free to continue its discriminatory policy of refusing to consider potential adoption by gay parents – despite breaching the Equality Act 2010.

The National Secular Society (NSS), which made the original complaint about St Margaret’s discriminatory policies, today criticised the move.

NSS President Terry Sanderson said: “It is a shame that this clearly incorrect appeals ruling will not be challenged. Our own lawyers have told us that the appeal panel’s ruling is full of holes but unfortunately we do not have the legal standing to mount a court challenge ourselves.”