Phil Woolas, the new Immigration Minister, was again at the centre of controversy last night after contradicting official government policy over the position of the Church of England.

The outcome of the Government’s attempt to reform the House of Lords would be to strip the Church of its privileges, he said. Within 50 years the Church of England would have lost the special position it has held in English life since the Reformation.

Mr Woolas told The Times: “Disestablishment – I think it will happen because it’s the way things are going. Once you open debate about reform of the House of Lords you open up debate about the make-up of the House. It will probably take 50 years, but a modern society is multifaith.”

His remarks caused consternation in Whitehall: the Government has no intention of igniting a political row over the issue, which has consequences for the monarchy.

Mr Woolas has been at the centre of controversy since Saturday when he called for a limit on immigration but then backtracked in a television interview 24 hours later.

The Ministry of Justice issued a statement last night making clear that it has no intention of taking any step to disestablish the Church as part of constitutional reforms.

The statement said: “The Church of England is by law established as the Church in England and the monarch is its Supreme Governor. The Government remains committed to this position and values the establishment of the Church of England.”

Last night there were doubts over whether Mr Woolas’s scheduled appearance tomorrow on the BBC One programme Question Time would go ahead. Senior figures in Westminster were fearful of further damaging headlines after his remarks over curbing immigration and disestablishing the Church.

Dr Rowan Williams, the Archbishop of Canterbury, fully supports establishment and has no wish for the issue to be opened.

The Government has reassured the Church of England that it will not embark on any move towards disestablishment unless the Church asks it to do so. With the Church bogged down in disputes over gays and women clergy, the last thing that it wants is a row over disestablishment. In Lambeth Palace and Whitehall the issue is considered political dynamite.

Sir Alan Beith, chairman of the Commons Justice Select Committee, whose remit includes constitutional reform, expressed surprise that Mr Woolas had mentioned the issue. He said: “This is an issue that is rather off-message at the moment for the Government. It is a huge undertaking.”

Sir Alan added: “I cannot see how it will have been greeted with enthusiasm around the Government. I am sure they do not want this being discussed at the next Cabinet meeting.”