The report said faith schools had a more privileged intake
Religious groups have joined together to reject Lib Dem calls for faith schools to be banned from selecting children by religion.
At their spring conference the Liberal Democrats will say such selection should be banned from new schools and phased out at existing ones.
A joint letter from a range of religious bodies in the UK is published in the Guardian newspaper.
The Lib Dems warn that faith-based admissions can be socially divisive.
This weekend they will debate a motion which says: "We believe that state funded schools should not be places that reinforce existing divisions within and between communities."
The party acknowledges that "many faith schools deliver an excellent quality of education" and are popular with parents.
But in a motion for their spring conference this weekend, they say: "While we acknowledge that many 'Faith' schools are in practice open to all of the local community, where they are not we recognise the restriction of the rights of other parents who find that they cannot get their children into a taxpayer-funded school because of a faith requirement."
Representatives of the Anglican and Catholic churches and from the Jewish, Muslim, Hindu and Sikh faiths signed a letter to the Guardian newspaper saying that banning selection of pupils by faith in religious schools would be "perverse and unjust".
The letter said: "We believe that parents and students should continue to have the right to choose the type of school in which they can flourish academically, socially and spiritually.
"With faith schools making up over a third of the state schools in the UK, millions of parents are choosing them and only in cases where schools are full to capacity can faith be used as a criterion for allocating places.
"The idea of removing one of the means by which these schools of religious character protect and enhance their valued ethos would be a perverse and unjust way of responding to the increasing demand for places in such schools."
It said that at a time of "genuine concern" about the breakdown of society, faith schools were not only teaching citizenship, tolerance, cohesion and respect, but "living with them as part of the very ethos of their schools".
According to the Church of England, the letter was also prompted by the publication of a critical report on admissions at faith schools and Academies from the London School of Economics.
The study, commissioned by the Research and Information on State Education trust (Rise), said that where such schools have the power to set their own admissions criteria, this should be withdrawn.
The Church of England has already committed itself to opening up its new schools to people of "all faiths or none". It has said it will set aside 25% of places at its new schools for this group.
In 2006, the Westminster government proposed that all new faith schools in England should be made to set aside a quarter of their places to children from other religions.
It was forced to retreat after meeting strong resistance from the Catholic church and instead, a voluntary agreement was reached.