Government officials have been urged to avoid offending people by using the more neutral 'Seasons Greetings' rather than Merry Christmas, according to a leaked memo.
The Sun reported that a senior official sent a private email to employees at the Department of Energy and Climate Change (DECC) highlighting that Christmas messages should not exclude those of other faiths or none.
"When picking, think Seasons Greetings rather than Merry Christmas," the email suggested.
It also said that images where bare skin is showing might not be appropriate for a multi-cultural audience. "As an organisation of multiple faiths and agnostics serving a community of the same and in the interest of inclusion, I'd avoid images with skin," it read.
However, the department has denied that any formal guidance has been issued to staff regarding their festive messages, and insisted that the phrase 'Happy Christmas' has not been banned.
"There is no formal guidance to staff about Christmas cards," a spokesperson said. He also highlighted an email sent by the Secretary of State for Energy and Climate Change, Ed Davey, to staff yesterday, in which he wished employees a Merry Christmas, and mentioned Christmas three times.
Tom Newton Dunn, the Political Editor at the Sun, tweeted that Davey was asked about the Sun's story in the Commons this morning. According to Dunn, Davey simply replied: "Merry Christmas".
Amid fears that Christmas is moving further away from its Christian roots, The Christmas Starts with Christ advertisement launched last week and quickly went viral on YouTube and Twitter.
Francis Goodwin, who heads up the campaign, said: "The supermarket viral ads, which were released last month, offered a 'feel good' take on Christmas designed to influence consumers into spending money with them. But they all avoided any reference to the religious meaning of the season. We thought it was time to produce the Christmas ad which the supermarkets are unable to make - one which shows where the feel good factor comes from. We are asking people to watch it, judge for themselves and share it with friends."
The video shows a 21st century couple watching their newborn baby. Slowly the scene transforms to the very first Christmas in a stable, and the couple into Mary and Joseph. Watch it for yourself below: