THE Labor states of Queensland and South Australia have intervened in a High Court challenge to the national school chaplaincy program, challenging the Commonwealth's argument that its power to make laws for corporations supports the controversial program.

But both states say another part of the constitution, which gives the federal government power to provide ''benefits to students'', allows the Commonwealth to fund school chaplains.

Queensland and South Australia also challenge the argument by Ron Williams, the Queensland father who launched the case, that the chaplaincy program breaches a clause in the constitution that forbids any religious test for an office under the Commonwealth.

NSW, Victoria and Western Australia have intervened in support of Mr Williams, arguing the program exceeds the Commonwealth's powers. The case will be heard in Canberra next month.

Legal observers see the case as a test of the ability of the federal government to use its financial muscle to bypass the states and directly fund programs in areas that have been considered state responsibilities.