Prime Minister Scott Morrison has challenged the Federal Opposition to back the Government's bill to ban religious schools from discriminating against LGBTI students, or allow Labor members a conscience vote on the issue.

Key points: The Coalition and Labor both have bills before the Parliament to amend the Sex Discrimination Act

The Coalition and Labor both have bills before the Parliament to amend the Sex Discrimination Act Scott Morrison is challenging Labor to back his bill to prevent religious schools discriminating against LGBTI students

Scott Morrison is challenging Labor to back his bill to prevent religious schools discriminating against LGBTI students Labor says the Prime Minister's ultimatum is "weaponising" the political debate

But the ultimatum has been met with accusations from Labor that Mr Morrison is "weaponising" the political debate.

The Coalition and the Labor both have bills before Parliament to remove the ability for religious schools to discriminate against LGBTI students on the basis that their sexuality is incompatible with their teachings.

Labor argues it supports the Government's bill, in principle, but has concerns that the wording of the proposed amendments to the Sex Discrimination Act actually opens up further grounds for discrimination.

The Senate agreed to defer debate on the Opposition's amendment until next year, with the Government's Senate leader Mathias Cormann saying the two parties needed more time to consider the matter.

Less than 20 minutes later Mr Morrison voiced a different position, urging Labor to back the Coalition's bill so the matter could be dealt with by the end of the parliamentary year.

"I'm prepared to move that bill in the House today," Mr Morrison said.

"I'll suspend standing orders to bring that vote on, and if the Labor Party and Bill Shorten are prepared to back this bill, we will vote for it today and we will get this done."

The Prime Minister then issued another challenge to the Opposition Leader.

"I'm prepared to have this dealt with as a conscience issue in my party and if he's prepared to do the same thing, then where the parties have been unable to agree, let's take the parties out of it," he said.

Furious Labor says Morrison's offer isn't genuine

Sorry, this video has expired Deputy Opposition Leader Tanya Plibersek slams Scott Morrison's ultimatum.

The offer of a conscience vote infuriated Labor's leadership team, who quickly turned on Mr Morrison.

"Labor members of Parliament do not support discrimination against children, we don't need to take the temperature of the party to know that, we have had this discussion again and again," deputy Opposition leader Tanya Plibersek argued.

Ms Plibersek criticised anyone who believed Mr Morrison's call for a conscience vote was a genuine offer.

"Our legal advice ... shows that the proposition that the Prime Minister is putting forward swaps one legal form of discrimination with another legal form of discrimination," she said.

The Opposition said the Coalition had been delaying dealing with the matter, despite Mr Morrison pledging to amend the legislation in the lead up to the Wentworth by-election.

"We thought that we could get this done in the first couple of weeks after the Wentworth by-election," Ms Plibersek said.

"But something changed.

"And I think what changed was that the right wing of the Liberal Party said to Scott Morrison, the Prime Minister: 'That's not happening - we're not doing that'."

The issue became a topic of heated debate during the Wentworth campaign after sections of the review into religious freedoms, conducted by former minister Philip Ruddock, were leaked.

That review was ordered by the former prime minister Malcolm Turnbull in the wake of the same-sex marriage plebiscite.

The full details of the review are yet to be released.