Church of England schools should cut down to one in 10 the number of places reserved for practising Anglicans, even if it means a fall in standards, the church's education chief has said.
The Bishop of Oxford, the Rt Rev John Pritchard, said schools must serve "the wider community".
The Church is reviewing admissions to 2,100 schools, some of which reserve 50% of places for churchgoers.
Secular campaigners said the comments were "a step in the right direction".
Mr Pritchard, head of the Church of England's education board, said the church's mission should not be about "collecting nice Christians into safe places".
He told the BBC News Channel: "I don't think I would be as concerned even if there was a decline in standards because what we want to do is to serve.
"It's about making a difference to people's lives so those who have the least chance I want to give the best chance. So if that does happen it would be very sad.
"But actually we have such skills in Church schools I really think we will be keeping that up and raising standards all the time."
Although the church's board of education can make recommendations to its schools, these are not binding. Mr Pritchard stressed any decision to change admission criteria "must be left to school governors".
Widening schools' admission criteria could prove controversial within the Church.
The Reverend George Curry, a traditionalist vicar and church governor in Newcastle, said: "We have to get the balance right. Is our school for everybody or is it a Church school?
"There is a question of fairness. Members of the Church see it as their own school and my unease is an unease about introducing a figure of 30% or 10%. What is the criteria for making it 10%?"
The Church hopes in the summer to publish updated guidance for the Diocesan boards that run its voluntary aided schools.
Some of these are very popular and give priority to children who attend church regularly when deciding which pupils to accept.
Earlier, asked on the BBC's Today programme why he had picked a figure of 10%, Rt Rev Pritchard said: "It's a pure hunch.
"Given a completely flat playing field I always say 10 to 15% feels right to keep the ethos of a Christian school, we need that because that's what parents want.
"They want a school that preserves the values and the disciplines and the habits of the heart that they find in Christian schools, so we do need that but after that I would want to say let's be as open as we can because our job is for the community.
"That's what the Church of England is always about, you know ...it's the only organisation that exists for the sake of its non-members, so we're here to serve the community and so I would just like us to move in that direction as much as we can," he added.
The Bishop of Coventry, Right Reverend Christopher Cocksworth, said: "The vision of Church of England schools is that we are here to serve the community. They shouldn't just be ghettos for very committed Christians."
Some believe the current system encourages families - particularly from the motivated and educated middle-classes - to start or increase religious activity in the hope of boosting their chances of entry to high-performing schools.
A spokesman for the Church of England said it was reviewing its guidance - but stressed that this was not binding.
"A key feature of the guidance is to emphasise the vital role of Church schools in serving the whole community," the spokesman said.
The Church says it is committed to reserving at least 25% of places in its new schools for pupils from the local neighbourhood regardless of faith background, and, in practice it says, most new Church of England schools reserve less than 50% for Christian applicants.
The Church of England also points out that it has a further 2,500 or so schools which are "voluntary controlled" and take all of their admissions from the nearby area, reflecting the make-up of the local community.
'Cat out of the bag'
The National Secular Society said Bishop Pritchard's comments were a "step in the right direction" but expressed doubt about whether changes would be made.
Society president Terry Sanderson said: "The Church has repeatedly denied that the strict selection criteria that are applied in some schools are the reason they perform so well.
"We are told that it is because of the 'Christian ethos'. Now the cat is out of the bag and the Bishop of Oxford has let us know that the Church is fully aware of why their schools perform so well."
Rabbi Dr Jonathan Romain, chairman of Accord, which campaigns to end religious discrimination in school admissions, said: "This is a very welcome step that attempts to help rectify current policy, which means that religion and discrimination in schools have become almost synonymous.
"Schools should be inclusive and tolerant and no state-funded school should be allowed to discriminate on the grounds of religion for any of their teacher posts or any pupil places."
Outgoing schools adjudicator Ian Craig has said that by giving parents credit for Church activities such as bell ringing and church cleaning, some faith schools - though not specifically Church of England ones - were inadvertently "skewing" their intakes.
However, he was accused by an MPs' committee of overstating the extent of the problem.