The federal government should cut all funding for any school that won't let parents pull their children out of sex- or gender-related classes, former prime minister John Howard has urged.

The Coalition elder has told the review into religious freedom - run by his long-time cabinet minister Philip Ruddock - federal funding should be used to coerce public and private schools into respecting parental preferences.

"Speaking practically, the preferable approach would be for the Commonwealth government to make it a condition of funding for both government and non-government schools that parental rights of this kind be respected," Mr Howard wrote.

He said it would be difficult for the federal government to pass a law of this kind "without invoking some international covenant" - though that should not be ruled out.