The teaching of theology at the University of Oxford has suffered a serious blow with a damning report that recommends ending the admission of school-leavers to some of its colleges.

The official report, which has been seen by The Times, raises grave concerns about the narrow Christian education that is being received by some of the younger students.

The review, conducted by a university panel headed by Sir Colin Lucas, a former vice-chancellor, concludes that Oxford’s seven Christian private halls risk failing to provide a rounded learning experience in keeping with Oxford’s liberal ethos.

In particular, it highlights concerns about the educational quality of life for young students at the university’s Anglican theological colleges.

The report will be seen as an attack on the evangelical wing of the Church of England, which draws intellectual credibility from the association of one of its colleges, Wycliffe Hall, with Oxford.

According to the report, what is on offer at Wycliffe does not resemble “an Oxford experience in its essentials” and is not “a suitable educational environment for the full intellectual development of young undergraduates”.

Wycliffe and St Stephen’s House, an Anglo-Catholic theological college at Oxford, have been told that they can no longer admit school-leavers to study undergraduate degrees. This will cut the number of students by as much as a quarter. This could have a “critical” effect on the department, the review admits.

Halls could risk losing their Oxford University licences altogether if they teach a fundamentalist Biblical doctrine on sexual ethics and in other areas of theology.

Wycliffe has this year been at the centre of a dispute between different traditions in the Church. In an unprecedented breach of normal academic protocol, the new principal, Dr Richard Turnbull, a conservative evangelical, was attacked in a letter by three former principals, who were from a more “open” evangelical tradition and demanded his resignation. At least five out of thirteen academics are no longer on the staff. The review, commissioned before the row at Wycliffe became public, could signal a sea change in the status accorded to theology at Oxford. It is an indication that the atheistic creed, preached by dons such as Richard Dawkins, is in the ascendancy.

It comes as the Archbishop of Canterbury, Dr Rowan Williams, travels to the US to meet Episcopal bishops in his struggle to resolve the disputes between evangelicals and liberals in the Anglican Communion.

According to sources on the conservative wing, Dr Williams’s plan to celebrate a secret Communion service for gay and lesbian clergy in London could end his hopes for unity. Dr Williams was until 1992 Lady Margaret Professor of Divinity at Oxford.

The review indicates that the Anglican intellectual establishment is firmly on the side of the liberal teachings espoused by Dr Williams during his time at Oxford.

The review, chaired by Sir Colin Lucas was commissioned before the row became public, but drafted when the controversy was at its height.

The review into the university’s seven “permanent private halls” – two Anglican, one Baptist and three Roman Catholic – has already been approved by the University Council and is to be implemented soon.

“There are plenty of academics at Oxford who would like to see no theology taught there at all,” said one source.

According to the review to be published later this week, all seven private halls are to have their licences reviewed if they are “shown to be departing from the values of a liberal education.” If the halls lost their licences, the three Protestant bodies that currently do so would still be able to train ordinands. But they would not be able to describe themselves as part of the university or admit students for Oxford degrees.

An Oxford spokeswoman denied that religious issues played any part in the review. “It categorically was not concerned with the specific allegations that have been made within Wycliffe Hall,” she said.

Dr Turnbull said: “I am very pleased with the review. The real challenge is not for us but for the department of theology.” He said that Wycliffe would have no difficulty making up its lost student numbers from elsewhere.

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