The US Supreme Court has backed religious groups in a major ruling that narrows that gap between church and state.
America's top court sided with Trinity Lutheran Church of Columbia, Missouri, which sued for being refused a government grant to help non-profit groups buy rubber playground surfaces.
The 7-2 ruling favoured the religious group and said banning a church from government money simply because it was a religious outfit was 'odious to our Constitution' and 'cannot stand'.
Missouri's constitution prohibits 'any church, sect or denomination of religion' or clergy member from receiving state money, language that goes further than the US Constitution's separation of church and state.
Three-quarters of the US states have provisions similar to Missouri's barring funding for religious entities.
But Liberal Justice Sonia Sotomayor wrote a dissenting opinion saying the court had swept away legal precedents that allow for limits on state funding of churches. Fellow liberal Ruth Bader Ginsburg also dissented.
'This case is about nothing less than the relationship between religious institutions and the civil government - that is between church and state. The court today profoundly changes that relationship by holding for the first time that the Constitution requires the government to provide public funds directly to a church,' Sotomayor wrote.
The ruling could help religious organizations nationwide win public dollars and also could buttress the case for using publicly funded vouchers to send children to religious schools rather than public schools.
But a footnote appeared to quash conservative's hopes the principle could be extended to allow widespread access to state money for churches.
'This case involves express discrimination based on religious identity with respect to playground resurfacing. We do not address religious uses of funding or other forms of discrimination,' Roberts wrote in the footnote.
White House spokesman Sean Spicer called the ruling a 'significant victory for religious liberty and an affirmation of the First Amendment rights of all Americans'.
Spicer added: 'This ruling reaffirms that the government cannot discriminate against individuals or organizations simply because they or their members hold religious beliefs.'
Trinity Lutheran runs a preschool and daycare centre and had wanted to resurface its playground. The discrimination against religious exercise in this case was Missouri's refusal to allow Trinity Lutheran 'solely because it is a church' to compete with secular organizations for a grant, Roberts wrote.
'The Supreme Court's decision today affirms the commonsense principle that government isn't being neutral when it treats religious organizations worse than everyone else,' said David Cortman, senior counsel at the Alliance Defending Freedom conservative Christian legal group who argued the case.
'Equal treatment of a religious organization in a program that provides only secular benefits, like a partial reimbursement grant for playground surfacing, isn't a government endorsement of religion,' Cortman added.
But Daniel Mach, director of the American Civil Liberties Union's program on freedom of religion and belief, expressed disappointment in the ruling.
'Religious freedom should protect unwilling taxpayers from funding church property, not force them to foot the bill. The court's ruling, however, focuses specifically on grants for playground resurfacing, and does not give the government unlimited authority to fund religious activity,' Mach said.
The justices overturned a 2015 ruling by the St. Louis-based 8th US Circuit Court of Appeals in 2015 upheld a trial court's dismissal of the suit.
Additional reporting by Reuters.
