The growth of popular faith schools is often blocked because they are used as an ideological "battleground" says the Church of England's head of education.
The Bishop of Oxford, the Right Reverend John Pritchard blamed secular campaigners for questioning the legitimacy of faith schools.
Bishop Pritchard was writing in a report on faith schools for religious think tank, Theos.
Fair admissions group Accord Coalition, called the paper a "whitewash".
The report, More than an Educated Guess, says the argument over state-funded faith schools in England has become ideologically loaded "acting as a battleground on which to fight larger battles about the role of religion in an increasingly plural society".
The report recommends "we should stop overloading a narrow issue with all our anxieties about religious difference".
The authors reject suggestions that faith schools are divisive in terms of race or ethnicity, and say they just as successful as non-faith schools in reflecting the make-up of English communities and promoting cohesion.
They do, however, admit there is an issue over admission policies in some faith-based schools which "can disadvantage the less well off".
They identify a need "for Christian schools in particular... to reassess policies around pupil selection.
"The most pressing concern should be to ensure that applicants from less privileged backgrounds are fairly represented in schools' intake."
The authors suggest some schools "may wish to explore ways to maintain their religious character whilst broadening their selection basis because of their historic ethic of hospitality and concern for the poorest in society".
In his contribution, Bishop Pritchard argues that allowing faith-based state schools to expand would take the heat out of the debate.
"Rather than continually adopting the battleground approach which often leads to a reticence on the part of local authorities to expand faith school provision, a better way would be to celebrate the quality, popularity and success of faith schools and seek to expand them.
"This way the problems of oversubscription and resulting admissions criteria would be greatly reduced."
He argues that campaigns by the British Humanist Association, the National Secular Society and Accord Coalition "inevitably" lead to "a defence from the churches and, all too quickly schools do find themselves at the centre of a debate which should properly be focused elsewhere".
Shifting the debate away from its "simplistic focus" would leave educationalists free to "make an honest assessment of why such schools remain so popular", he argues.
Rabbi Dr Jonathan Romain, of The Accord Coalition, said the report was "biased in favour of current practices of faith schools" and that it "ignores the large body of academic studies which indicates the divisive impact of faith schools both socially and economically.
"The paper is often superficial, and arguments and facts are often spun to serve particular aims under a guise of balanced analysis."
One in three state-funded schools in England is faith-based and 99% of these are Christian, say the authors.