A jazz-singing father of six has won a battle against the Commonwealth in the High Court over the school chaplaincy program.
Ron Williams, from Toowoomba, Queensland, took issue with what he called a religious missionary being put into schools.
He challenged the program on the basis Commonwealth officers are not allowed to be subject to a religious test under the Constitution.
The court dismissed that claim, but did find the Commonwealth had no power to enter the agreement which funded the program.
The national chaplaincy program was set up in 2007 by the Howard government to provide for the spiritual wellbeing of students.
It was later modified by Labor to allow schools to choose to employ either a chaplain or a non-religious student welfare worker.
Under the program, schools could choose to employ a chaplain for spiritual guidance although pushing religion was banned.
Today's decision against the program will affect around 2,500 chaplains across Australia and could have implications for other state-run programs.
The Government said it was carefully reviewing the High Court's decision.
"The only government program that was challenged and invalidated by this decision was the National School Chaplaincy Program," Attorney-General Nicola Roxon said in a statement.
"The Government is committed to maintaining funding for important community programs."
Opposition Leader Tony Abbott said it would be a "real pity" if the chaplaincy program was not able to continue.
"We invented the program, we support the program, we want it to continue," he said."Let's look at the court's decision and let's see what the Government has in mind.”