The Bill, which returned to the Commons for its final stages before it goes to the Lords, creates a maximum seven-year jail sentence for anyone convicted of intending to stir up religious hatred.

In a new concession last night, ministers moved amendments to clarify that citizen's arrest under the proposed legislation would not be possible.

The move follows concern that otherwise, people could take offence at comments in a public meeting or even in a church, and simply seek to arrest the speaker.

Both the Conservatives and Liberal Democrats oppose the new law. Dominic Grieve, the shadow attorney general, said yesterday that the Bill's prospects of getting through the Lords "are pretty limited".

Mr Grieve reaffirmed fears that as the Bill failed to define religion, it could be used to protect Satanists.

However, Charles Clarke, the Home Secretary, insists that while new legislation is necessary it will not prevent people telling jokes about religion or curb religious freedom.

The churches' petition warned that criminalising religious hatred "could well have the opposite effect to that intended" and would infringe freedom of speech.

Gathered in just five days to match the speed with which the Government is pushing through the plans, the petition says: "The mere quoting of texts from both the Koran and the Bible could be captured and criminalised by this law." It adds: "Extremists have shown themselves willing to use malicious prosecution to further their purposes and this law would present such prosecution opportunities against all religious communities."

The churches' fears were supported by Danny Nalliah, 40, a Pentecostal pastor, who last year was found to have breached a religious vilification law in the Australian state of Victoria after complaints from Muslims.

Mr Nalliah came to the Commons to warn MPs that they were about to make the same unintended mistakes as Australian politicians.

But Mr Clarke made clear that the Government intended to press ahead with the proposal. An aide to the Home Secretary insisted that the proposed British law was much less severe than the Australian legislation.

The aide acknowledged that unlike in Victoria where the legislation was part of the civil code, the Racial and Religious Hatred Bill in the UK would create a criminal offence. But the aide insisted nonetheless that the Australian version was "more restrictive and far wider in scope than ours would be".

Mr Nalliah told The Daily Telegraph that he fell foul of the law for quoting from the Koran at a seminar on Islam in March 2002.

In December last year, a judge upheld a complaint from the Islamic Council of Victoria that Muslims had been vilified in the seminar, a newsletter and a website article.

Mr Nalliah and his co-defendant, Daniel Scot, have now appealed to the Australian supreme court after being ordered to apologise to the Islamic Council and to spend about =A330,000 on newspaper advertisements explaining the ruling.

Mr Nalliah, who faces up to six months in jail if his appeal fails and he continues to defy the ruling, warned last night that in Australia, "the law has caused severe tensions between Christians and Muslims".

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