The government is activating a power it says will allow councils in England to hold prayers at meetings.
Communities secretary Eric Pickles says he is "effectively reversing" the High Court's "illiberal ruling" that a Devon council's prayers were unlawful.
He says part of the Localism Act that aims to give councils greater powers and freedom will be brought in early.
The National Secular Society questioned the act's reach and said the move could be challenged in court.
The group opposes prayers in "a secular environment concerned with civic business".
Earlier this month, in response to legal action brought by the society, the High Court ruled that Bideford Town Council had acted unlawfully by allowing prayers to be said during meetings.
Mr Justice Ouseley said that, under the Local Government Act 1972, the council had no powers to hold prayers as part of a formal meeting.
The controversial judgement has been regarded by many as an example of the marginalisation of Christianity, as well as a test case that has applied to councils in England and Wales since 10 February. Bideford Town Council has said it would appeal against the ruling.
The government argues that it was not intention or will of Parliament for this act from 40 years ago to be used to prohibit prayers.
"The High Court judgement has far wider significance than just the municipal agenda of Bideford Town Council," said Mr Pickles.
"By effectively reversing that illiberal ruling, we are striking a blow for localism over central interference, for freedom to worship over intolerant secularism, for Parliamentary sovereignty over judicial activism, and for long-standing British liberties over modern-day political correctness."
He added that the Bideford council case should be "a wake-up call".
"For too long, the public sector has been used to marginalise and attack faith in public life, undermining the very foundations of the British nation. But this week, the tables have been turned."
The Localism Act 2011 establishes a "general power of competence" enabling councils legally to do anything an individual could do unless specifically prohibited by law.
The communities secretary has fast-tracked the parliamentary order activating the power, hoping it will "give councils that want to continue holding formal prayers the confidence and legal standing to do so".
The power can be exercised by all major local authorities in England from Saturday, and should be available to smaller town and parish councils - like Bideford - by the end of March.
The National Secular Society had called the High Court ruling "an important victory for everyone who wants a secular society, one that neither advantages nor disadvantages people because of their religion or lack of it".
In response to Mr Pickles' latest statement, its executive director Keith Porteous Wood said: "A number of senior lawyers have expressed doubt whether the Localism Act will, as Mr Pickles hopes, make prayers lawful, and the Act was clearly not passed with that express intention.
"His powers to pass legislation are not, as he implies, untrammelled. Council prayers increasingly look set to become a battle between the government and the courts at ever higher levels."
The Localism Act's "general power of competence" does not apply to Welsh councils, but the Welsh Assembly Government does have the power to legislate in this area.