Church leaders are angry that a pornography baron can apply to run a radio or television station but Church organisations can not.
Senior churchmen, led by the Archbishop of York, Dr David Hope, accuse the Government of discrimination and have begun a campaign to amend the Communications Bill.
The Bishop of Manchester, the Rt Rev Nigel McCulloch, said he was "perplexed, bewildered and utterly dismayed" that religion was being treated so unfairly.
The only her groups facing a ban are convicted criminals and political parties. In contrast, almost anyone else, from brothel owners and publishers of pornography to advertising agencies and foreign businessmen, can submit applications.
The Government defends its stance by saying that there are few licences go around and that it needs to "avoid discrimination" between the "many different religions practised in Britain", although its new watchdog, Ofcom, has discretion to overrule such a ban.
The Bill, which the Government hopes will be law by the summer, is designed to create a "level playing field" for the distribution of radio and television licences.
Lord Puttnam, the Labour peer and former film producer who chaired the joint committee on the draft Bill, believes that the Bill could breach the Human Rights Act.
The bishops are particularly angry that, while the Government singles out religion, it is doing little to stem the growing tide of sex and violence on television. They also want the Bill to offer far more protection to BBC religious broadcasting amid fears that it is being eroded.
Bishop McCulloch, the Church of England's leading spokesman on communications, conceded that there could be worries about American evangelists moving to Britain. But he said there were already safeguards on programme content.
The Government's ban was particularly perplexing when more than 70 per cent of the population had described themselves as Christian in the latest census.
The Culture Department said yesterday that the Bill allowed religious groups to apply for licences for relatively uncluttered national digital radio services but not for analogue radio or television. "The aim is to avoid giving one religion an unfair advantage," it said.