Revd David Robertson accepted schools north of the border were "still in many places good" but stressed they were struggling and the "one size fits all" approach is failing.
He has used his New Year message to call for a more diverse system, which he claims will benefit the poorest.
He said: "Scotland's education system, once the envy of the world, is still in many places good.
"I pay tribute to the teachers, lecturers, administrators who in general do a great job. But there is no doubt that the system is in decline.
"A monolithic, one size fits all, state education system is failing, especially the poor.
"The rich are able to send their children to private schools, whilst often publically endorsing a public system that they don't use."
Mr Robertson continued: "As a more militant secularism seeks to remove all traces of Christianity from Scotland's Christian State education system, it is clear that there needs to be a rethink and radical re-evaluation of the whole school system in Scotland.
"I agree entirely with the Roman Catholic Church's Peter Kearney who recently called for a more diverse system and an increase in the number of faith schools.
"I don't have a problem with the secularists having an atheistic secular education system for their children.
"It's when they insist that being for everyone else's children as well, that it becomes a problem.
"It's time for diversity and equality in the education system. It's time for more Christian schools."
Elsewhere the moderator criticised the Conservative Party for the UK Government's failure to tackle the national debt.