Prime Minister Tony Blair has announced that there can be no exemptions for faith-based adoption agencies from the new Sexual Orientation Regulations.

Cardinal Cormac Murphy-O'Connor triggered a row over gay adoption last week when he said that the Catholic Church's adoption agencies would close rather than be forced to place children with gay couples.

His letter last week to Mr Blair on the issue won the support of the Archbishops of Canterbury and York, while staunch Catholic communities secretary Ruth Kelly stood by her support for an opt-out for the Catholic adoption agencies.

In a statement released Monday afternoon, Mr Blair said he had listened to the "strongly-held" views on all sides but that he started from a "firm foundation" that there was no place in society for discrimination.

Gay couples should be able to apply to adopt like any other couple, he said.

Cardinal Cormac Murphy-O'Connor responded to Mr Blair's decision, saying, "We are of course deeply disappointed that no exemption will be granted to our agencies on the grounds of widely held religious conviction and conscience."

He added, "This debate has raised crucial issues for the common good of our society," he said in a statement.

The Equality Act, which will come into effect in England, Wales and Scotland in April, outlaws discrimination in the provision of goods, facilities and services on the basis of sexual orientation.

The best that faith-based adoption agencies can now hope for is a transition period before the regulations come fully into force at the end of 2008 for existing adoption agencies.

Ann Widdecombe, the former Home Office minister and herself a Christian, has voiced her support for an exemption: "It's one thing to say that gay people can adopt and quite another to say they must be able to adopt from a specific agency.

"It's like saying someone not only has the right to have an abortion but they also have the right to demand an abortion from a specific doctor, regardless of that doctor's freedom of conscience."