Christians are being "vilified" by British courts and "driven underground", Lord Carey, a former archbishop of Canterbury, has said.
In a written submission to the European Court of Human Rights (ECHR), he blames judges for treating some worshippers as "bigots".
He also warns that believers are being sacked for expressing their faith.
The criticism is part of an appeal to Strasbourg judges to protect religious freedom ahead of a landmark case.
Lord Carey - who was archbishop from 1991 to 2002 - has voiced concern that a recent "secular conformity of belief and conduct" has meant that conduct in keeping with the Christian faith is effectively being "banned" in the public setting.
In his submission, he says the "the State and Courts... not parliament" are destroying the legal right to freedom of religion of "any substantive effect" by insisting on stringent readings of equality law.
He also argues that if rulings against wearing crosses and expressing Christian faith are not reversed it could lead to believers facing a "religious bar" to employment.
The former leader calls for the ECHR to safeguard religious values - something he accuses the British judiciary of failing to do in "case after case".
A hearing at the court in Strasbourg on 4 September will consider the cases of British employees who claim they have been discriminated against due to their Christian beliefs.
The hearing will also deal with the case of a relationship counsellor who lost his job after refusing to give sex therapy to gay couples.
In his submission, Lord Carey admonishes British judges who "consistently applied equality law to discriminate against Christians" and cautions against a drive to remove Christian traditions from the public sphere.
He writes: "In a country where Christians can be sacked for manifesting their faith, are vilified by state bodies, are in fear of reprisal or even arrest for expressing their views on sexual ethics, something is very wrong.
"It affects the moral and ethical compass of the United Kingdom."
Lord Carey also hits out at discrimination in the workplace, warning that "Christians are excluded from many sectors of employment simply because of their beliefs; beliefs which are not contrary to the public good".
The National Secular Society said the justice system should not be "weighted in favour of the religious, violating the principle of one law for all".
It said Christians' "freedom is only limited, and rightly so, when they seek to discriminate against and therefore impinge adversely on others as part of employment or providing services to the public".
National Secular Society executive director Keith Porteous Wood said: "Being required to respect others equally does not compromise the ability to worship or manifest religion."
He added: "Lord Carey is not just wrong, but the truth is the opposite of what he asserts. Far from the UK being less intolerant than the rest of the world on religion, it is perhaps the most religiously tolerant country in the world."