Education Secretary Michael Gove says he is open to the idea as part of reforms to his department, according to Premier Radio.
The move comes after high profile anti-faith campaigner Professor Richard Dawkins suggested the idea.
The Education Secretary said he would be "interested" to look at proposals for non-religious schools after Prof Dawkins, author of 'The God Delusion', said last month that he approved of the idea of setting up a "free-thinking" school.
Ann Widdecombe, the former Home Secretary who is also a believer, said it is not something that should be opposed.
She told Premier Radio: "If you can set up faith schools, then I think quite obviously you must also be allowed to set up a school that will cater for people whose parents are bringing them up specifically to have no faith."
Widdicombe added: "I think it is a great pity if somebody is brought up that way, but our job is to win those people over, not to look to the law to do it for us."
Addressing the House of Commons education select committee, Mr Gove said parents opposed to faith-based schools should be given more opportunities to educate their children in the way they want in the state education system.
Around a third of the 21,000 state primary (elementary) and secondary modern (high schools) in England are currently faith schools. The majority are Anglican or Roman Catholic, with small numbers of Jewish, Muslim, Sikh and Hindu schools.
By UK law, all other schools must provide religious education and stage a compulsory Christian assembly every day, although parents have the power to withdraw their children from attending.