Ministers have been given the go ahead to reject churches' calls to cut the maximum stake on the 'crack cocaine' of gambling from £100 to £2.

The highly addictive fixed-odd betting terminals (FOBTs) should take a stake of £30 or less every 20 seconds, the Gambling Commission recommended after a consultation for the Department for Digital, Culture, Media and Sport (DCMS).

The watchdog's recommendations are significant because the commission is the government's statutory adviser on gambling and ministers would be expected to follow its guidance. Government ministers are thought likely to make a decision in the coming weeks. 

The recommendation will be a relief to the betting industry which has warned that a cut to £2 would threaten thousands of jobs and harm the economy as most of the £500million of tax revenue each year from FOBT machines would be lost.

However Alan Smith, the bishop of St Albans, hit back at the recommendations, warning they don't go nearly far enough.

'Any stake on Fixed-Odds Betting Terminals higher than £2 simply does not go far enough to protect the interests of the most vulnerable, their families, and communities,' he said.

'When ministers choose the stake for these machines, they must put the interests of those affected by them ahead of concerns about tax take or the powerful gambling lobby.

'We desperately need a scheme of gambling regulation that is ordered, sensible, and has care for the vulnerable at its core. I hope the ministers will be courageous and use the review to do the right thing and reduce the maximum stake to £2.'

The Church of England, along with the Methodist Church, the Baptist Union of Great Britain and the Church of Scotland have campaigned for the maximum stake to be cut to £2.

In October ministers confirmed the stake would be £50 or less but have yet to specify a limit.

Last year alone £1.8billion was lost through FOBTs and the average gambler lost £1,250.

The Commission left the option for a £2 stake open but said it was not necessary and recommended a series of other measures to help problem gamblers. It suggested that bookmakers track customers' behaviour to identify those with addiction problems and ban players from switching between high-stake FOBTs and lower stake 'quickfire' games in one session.

As well as support from churches, a growing number of MPs are backing calls for a £2 maximum stake with Labour's Tom Watson calling the review 'deeply disappointing'.

'These machines are at the heart of the UK's hidden epidemic of problem gambling. The government must cut the stake to £2 on all FOBT machines including the highly addictive roulette style games, as well as increase the delay between each play,' he said.

Gambling Commission Chief Executive Neil McArthur said: 'We've put consumers at the heart of our advice – advice which is based on the best available evidence and is focused on reducing the risk of gambling-related harm.

'In our judgment, a stake cut for Fixed Odds Betting Terminals alone doesn't go far enough to protect vulnerable people. That is why we have recommended a stake cut plus a comprehensive package of other measures to protect consumers.

'We have proposed actions that will tackle both the risk of harm and provide solutions that are sustainable in the longer term.'