Religious education is more vital than ever in an increasingly diverse society and needs a higher status, says former home secretary Charles Clarke.
Mr Clarke is co-author of a report calling for better religious education in school and a widening of the subject to include "beliefs and values".
The report argues that assemblies should no longer be expected to have a "broadly Christian" character.
Mr Clarke says understanding other faiths builds more "tolerant" views.
The report, co-authored by Prof Linda Woodhead of Lancaster University, says the place of religion in schools in England and Wales is still shaped by legislation from the 1940s, despite "enormous change in the religious and cultural landscape".
'Learning to talk'
"Our society has become massively more diverse," says Mr Clarke, a former Labour education secretary, in a report supported by the Economic and Social Research Council.
As well as those not identifying with any religious group, there are many more "different religions and ranges of belief within religion", he says.
"We are becoming more diverse, more individual. That's a good thing, but children growing up need to understand that society and be able to interpret it," says Mr Clarke.
The idea that religion would eventually be "discarded as irrelevant" has proved to be mistaken, he says.
Prof Woodhead says understanding about religions such as Islam, Hinduism or Judaism should be part of everyday life.
"These are children in your classroom or your neighbours, we're all part of the same society and we have to learn to talk to each other more intelligently," she says.
But the report argues the place of religious education in school needs to be updated and strengthened to stop a decline which has seen it treated as a "second-class subject".
It calls for a national syllabus that would be taught in all state schools and that it should be known as "religion, belief and values".
Act of worship
The report argues in favour of keeping a daily "act of collective worship" but that it should no longer be expected to be of a Christian character, but could reflect the "values and ethos" of the school.
The study says faith schools should continue and that parents should be able to choose to send their children to schools of their own religion.
Mr Clarke argues that, rather than driving segregation, good quality religious education can protect against extreme interpretations of beliefs that can be "divisive and dangerous".
"The best defence against that is to have children who are well-educated, well-informed and understanding about religions in our society," he says.
"Teaching about religious education generally builds a more tolerant society, a stronger society, a more resilient society to deal with the pressures that can otherwise lead to segregation in communities up and down the country."
But the proposed way of reforming the subject has been opposed by the Catholic Education Service.
The Bishop of Leeds, Marcus Stock, said it would not be acceptable for the state to "dictate what the church is required to teach in Catholic schools".
He said there needed to be a choice for schools in whether religion should be taught as a theological rather than "sociological" subject.
The National Secular Society rejected the proposals as "a real disappointment".
"The proposals represent baby steps in the right direction, but the report generally appears to be an admission that necessary reforms are not possible without the approval of religious bodies.
"That is a worrying state of affairs for a modern education system," said the group which campaigns for a separation of religion and state.