Fears about religious fundamentalism should not make local councils rule out using faith groups, Liberal Democrat leader Charles Kennedy has said.
People still seek out churches in crisis moments, says Mr Kennedy
Mr Kennedy said the role of religious groups was controversial in America and was moving up the UK agenda.
He argued that churches had to overcome the distrust caused by headlines on abortion and sexuality.
His speech at a church in London was the first in a series of lectures for the Faithworks group.
There has been controversy in America over calls for a wider role for faith groups in education and other public services.
"Of course, the headlines are often about abortion, sexuality or blasphemy laws," he said. "But they are a distortion.
"What people sometimes fail to acknowledge or recognise is that the focus of most faith based organisations is more practical and more domestic.
"It's a matter of battling poverty, here and abroad; or seeking to give our children a decent start - keeping them away from drugs and crime; and, at the other end of the lifespan, caring for our elderly and infirm."
Mr Kennedy said some local councils distrusted faith groups, perhaps due to fears they would use their work to spread a religious message or at worst to sow fundamentalist discord.
There was no appetite for the traditional separation of church and state to end, he said.
"But to take this principle to its extreme and rule out involvement of faith groups from delivering benefits to local people is an attitude that is out of date and patronising, and it is also an enormous waste.
"Society should put that commitment and that potential to good use."
Belief in politics
Mr Kennedy said churches had to overcome distrust and show they believed charity should be all-inclusive.
Despite talk of Britain "turning away from organised religion", he said it was striking that people sought places of worship when they saw crises like the Asian tsunami.
Mr Kennedy said: "It is vital that we don't exercise all mention of belief from the political world.
"Religious faith of all denominations can provide society with a moral compass - a sense of what is right or wrong that doesn't shift in the winds of political expediency."
People above all wanted politicians to believe in something, he added.