The study titled 'Secondary school choice and selection' suggests black families are 68 per cent more likely to choose a church school than white families.
Despite that, it states: "If a white child and a black child apply for a single remaining seat at a Church school in London, the black child is less than half as likely to be admitted."
The findings contrast with different reports which suggest Catholic schools are more diverse than the national average with a fifth of UK black children attending them.
The Accord Coalition campaigns against the admissions policies of faith schools claiming it leads to discrimination and division.
Responding to the findings of the government report, chair Rev Stephen Terry said: "The Department for Education should be credited for shinning a light on how religiously selective admission policies are a significant source of socioeconomic disadvantage and on the especially under-reported problem of indirect racial discrimination.
"Schools selecting by faith is not only leading to religious division, but driving it on the grounds of economic background and race too."
The Church of England's chief education officer, Rev Nigel Genders, said: "Church of England schools are there for everyone and we take our commitment to promoting diversity and opportunities for children from disadvantaged backgrounds very seriously.
"Reports, such as this, from responsible bodies based on authoritative research, will always be welcome, even where they may indicate a need for further work to be done. We are considering this study in more detail and seek to understand the complexities that it demonstrates.
"The report acknowledges that the underlying reasons for some of these apparent differences are 'not clear'.
"It also found no evidence that church schools are 'cream-skimming' pupils or applying oversubscription criteria inconsistently.
"However, it highlights some possible challenges and we will look at it in more detail."
The Catholic Education Service declined to comment.
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