Tim Farron, who is standing to replace Nick Clegg, said there should be no national Church and that he had told the Archbishop of Canterbury about his view.
Mr Farron is a church-going Anglican and has been vocal about his faith.
In an interview with Pink News he said: "I think the Church of England is compromised by being part of the furniture of the state.
"Although I'm a Christian myself, I do not believe I have any right to impose my faith on anybody else.
"I think what's happened to the Welsh church since it was disestablished years ago has been healthy for the Church and healthy for the nation of Wales.
"That is the fundamental thing, and if you do that all those other things fall away.
"From a Liberal point of view definitely, but also from a Christian point of view - I always argue to Anglicans that you're trapped by being part of the state.
"I think it damages Christianity to have an established church, and it certainly it's also illiberal to have a state church anyway."
In the interview the MP also said he had 'changed position' on the Equality Act (Sexual Orientation) Regulations in 2007, which he voted against.
The law was used in the case against Ashers bakery in Northern Ireland which was deemed by a judge this week to have discriminated against a gay man by refusing to make him a same sex marriage cake.
Mr Farron told the website the court made the right decision, "I think that's about goods and services," he said.
He added: "My take on stuff like the cake issue, which was not live at that point, and the B&B issue, which had become live, it is un-Christian to turn people away from your establishment.
"You should not, if you offer services, be in the situation where you are discriminating."