Mr Thorpe said the changes would authorise "state-sanctioned discrimination" against marginalised groups, as he joined a diverse delegation of advocates speaking out against the bill inside Parliament House on Tuesday.

Debate on the religious discrimination bill resumed on Tuesday afternoon with Prime Minister Scott Morrison facing a rocky path to deliver the long-promised changes before Australians head to the polls.

Mr Morrison wants to pass the bill before the federal election, alongside separate amendments to the Sex Discrimination Act.

But the Prime Minister is staring down a revolt from moderate Liberals, meaning Labor's support will likely be needed to pass the legislation.

Labor has offered conditional support to the bill, but has yet to settle on a final position.

Attorney-General Michaelia Cash presented amendments to the government's proposal at the Coalition party room meeting on Tuesday morning.

The Canberra Times understands the internal debate was still going when Coalition MPs and Senators had to rush off for Parliament's resumption at 12pm.

With question time from 2pm, the party room meeting won't recommence until after 3pm at the earliest.

Ahead of the meeting, Finance Minister Simon Birmingham confirmed the government planned to amend the Sex Discrimination Act to ban faith-based schools from expelling students on the basis of their sexual orientation.

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However, those protections won't immediately be extended to transgender students. Senator Birmingham said expanding protections to transgender students would be subject to a review from the Australian Law Reform Commission.

Revelations about the narrow scope of proposed changes to the Sex Discrimination Act sparked a furious response from equality advocates on Tuesday morning.

Advocates had not only wanted gay and transgender children to be protected from expulsion on the basis of their sexuality and gender identity, but also shielded from suspension and other forms of discrimination.

Equality Australia chief executive Anna Brown accused Mr Morrison of a "complete failure to live up to his commitment" to protect students. The Prime Minister first promised protections ahead of the Wentworth byelection in 2018.

The scope of amendments to the Sex Discrimination Act also appeared to be at odds with the approach Mr Morrison set out in a letter late last year to Labor leader Anthony Albanese.

In the December 1 letter, seen by The Canberra Times, Mr Morrison noted that he planned to amend the act "in keeping" with his speech to parliament when the bill was introduced.

In that speech, Mr Morrison stated that there was no place for any form of discrimination against a student on the basis of their sexuality or gender identity.

A commitment to protect gay students has won over at least one moderate Liberal MP, with Moncreiff MP Angie Bell confirming that she would support the bill.

"I will always advocate for an Australia free from discrimination for all. This bill and the amendments I have successfully advocated for are an important step in the right direction," Ms Bell said in a statement.

Mr Thorpe, who came out as gay in 2014, addressed the mental health toll and suicide risk for gay and transgender people as he implored the parliament to reject the bill.

"With this bill, we want to see it disappear ... it has no friends in Parliament," he said.

"It is something that we would prefer to see quashed. Get rid of it".

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