These should be buoyant times for Catholic schools in England and Wales.

The church’s 1,817 primaries and 394 secondaries are well-regarded and, with the exception of a few inner-city comprehensives, popular with parents. They are routinely oversubscribed, in demand from families of all faiths and none. Despite coping with their fair share of poverty - close to the national average as measured by the numbers of pupils eligible for free school meals - Catholic schools produce better than average GCSE results, and are regularly praised by inspectors for engendering a constructive sense of community.

There is plenty of support in Westminster, too, where enthusiasm for faith-based schools remains undimmed. This is so much the case that the Church of England is proceeding with its plan for 100 new Anglican secondary schools. Since Labour regained power in 1997, both Jewish and Muslim sectors have expanded. Peter Vardy, the evangelical Christian and millionaire head of the Reg Vardy car auctions firm, is sponsoring a chain of seven state-funded schools, six of them academies with direct encouragement from Downing Street. These are the schools, including Emmanuel College, Gateshead, which have been accused of teaching creationism.

Despite the general mood of optimism, the Catholic bishops, are finding little cheer. Quite the contrary. They see a growing range of threats to the integrity of a “voluntary-aided” system that has survived, largely unaltered, since the Second World War (with the state, through local authorities, paying for the running costs of schools which are nonetheless owned and controlled by the Catholic and Anglican dioceses). Some Catholic bishops feel they are actually under attack, and the gloomiest predict a time when the Church is no longer involved in state education.

Their demons include a historic liberal-left opposition to religiously-based schools which remains as vocal as ever, in town halls, parliament and the opinion pages of newspapers.

The status quo is also threatened by the continuing stream of government measures aimed at reforming the way schools and local authorities are run.

But there are other, broader challenges, too, which have gathered over time: the changing place of the Church in British society is forcing a reassessment of the Catholic school system and its relationship with the wider community. It is not a comfortable process.

The most immediate political threat is on the issue of school transport.

Earlier this year, ministers suggested that local authorities be given the power to charge pupils for the buses they rely on to attend denominational schools. As Catholic secondary schools have quite deliberately been sited to serve widely spread populations, this could be seriously damaging. At present the mood in the Catholic Education Service, the bishops’ education agency, is slightly more hopeful than it has been in recent months, with ministers apparently showing some signs of drawing back from plans which would prove hugely contentious.

The Government’s ambitious programme of building and renovation is also a worry. At present, Catholic dioceses have to contribute 10 per cent of any major capital works, which means that if their schools are to take part in the Government’s 10-year programme “Building schools for the future”, the Church will have to find up to pound;250 million - which it does not have.

Catholic schools are very keen to take part and for some months now Church officials have been negotiating with the Department for Education and Skills about some form of financial aid. None has been forthcoming. The bishops’ cause has not been helped by their refusal to sign up to the burgeoning academy movement, the Government’s favourite mechanism for creating new schools and refurbishing old ones. Schools receive funds directly from the state and are taken out of the local authority structure.

They would also be taken out of direct diocesan control, hence the caution.

The arrival of citizenship on the timetable has caused concern, with some sceptics feeling that its discussion of individual and collective morality is a secular way of undermining religious education (although the Education Secretary Charles Clarke appears to value RE). The Learning and Skills Council review of national post-16 provision has reminded the Catholic dioceses that their school sixth forms are smaller than average and - in line with other small sixth forms - tend to perform worse than average. Even the Tomlinson proposals allowing pupils to attend lessons at more than one institution from the age of 14 onwards has led to suggestions that the Catholic nature of their education would be somehow diluted.

The mood of suspicion has not been improved by the continued sniping from secularist commentators and politicians. The latest round of complaints was provoked by calls from Muslim academics for an increase in the number of state-funded Islamic schools.

Last month the select committee covering the Office of the Deputy Prime Minister published a report on social cohesion which dwelt significantly on the sort of ethnic division felt to have been behind the northern riots three years ago. The MPs made comparisons with the religious tribalism of Northern Ireland.

They scarcely justify paranoia, but there are plenty of reasons why Catholic education officers might be politically wary. At least they can argue against change at Westminster. More disturbing are the long-term social changes which have seen Mass attendance dwindle - even though it is more respectable to be Catholic than at any time since Bloody Mary.

There is a growing sense of concern about what Catholic schools are for, and most importantly, whom. Why bother in the first place, if they are incapable of turning out church-going followers?

It is no coincidence that there is a shortage of Catholic teachers, too, heads and deputies in particular. The sector depends heavily on non-Catholic staff: yet, understandably, wants good parishioners at the top of the school structure. The result is that Catholic schools have significantly more trouble making good-quality appointments. The shortage is such that some diocesan education officers are privately calling on the church hierarchy to accept the appointment of Catholic divorcees, or those with otherwise “irregular” relationships, who currently find themselves barred from senior posts.

Questions about the place of Catholic schools within the overall system have become even more insistent following the Government’s ban on parental interviews (commonly used in oversubscribed voluntary-aided schools to determine how committed a family is to the Church). This September’s intake of pupils will be the last to have been through the process. Interviews were outlawed at the behest of the Anglican and Catholic Churches, who felt that they reinforced a sense of unfairness and could favour more articulate families.

Explaining its stance, the Catholic Education Service has explicitly said that children should not be deprived of a place in Catholic schools simply because their parents fail to attend church. It also acknowledges that a large and probably growing proportion of their pupils have little connection with the parishes from which they theoretically come.

But it leaves the schools with a complicated question: who should they be educating, if not the pious? Should the system be there as a form of missionary work for the local community, for example, for people who may not even be Catholic? This historically has been the position of Anglican schools, which take all-comers and educate a great many more Muslims than the tiny state-run Muslim sector.

Professor Gerald Grace at the Centre for Research and Development in Catholic Education acknowledges the difficulty of turning away church-going families who may well do a great deal for their parish. All the same, he believes that a more community-minded, non-tribal approach to admissions is the way forward. “The 1997 document The Catholic School from the Sacred Congregation for Catholic Education is very clear about who Catholic schools are meant to serve,” he explains. “It says that first and foremost the Church offers its educational service to the poor: to those who lack family support and affection, and those who are far from the faith. That can include those who are Islamic, Jewish or of no faith. This is a strong mission statement that Catholic schools ought to be at the service of the poor.”

If anything, though, the emergence of league tables and the competition for places is pushing schools the other way, he believes. “The whole system runs the risk of going up-market.”

MILITANT ACTS OF THE CATHOLIC CHURCH

The Church is fighting to maintain a distinctive Catholic ethos at a time when Mass attendance is declining and families from other faiths want school places.

* In November the Church in Scotland said Catholic children should not mix with Protestants at the combined Dalkeith schools campus in Midlothian.

Shared teaching was ruled out, as were shared playgrounds and shared dining arrangements. At one point, pupils were even prevented from talking to one another.

* Last year St Augustine of Canterbury upper school, a popular joint venture between the Church of England and the Catholic Church in Oxford, was closed down because the Archdiocese of Birmingham preferred to create a new Catholics-only secondary school. The decision bewildered the staff and pupils, and was openly criticised by the CofE.

* St Philip’s sixth-form college, Birmingham, finally closed in 1995 after a long-running campaign by the city’s Oratory Fathers, the Catholic trustees. Despite the popularity of the college, the trustees said it was not sufficiently Catholic for them to remain involved, and the institution was “given away” to South Birmingham college. The move was condemned by teachers, parents and the Further Education Funding Council, which published a report saying the priests lacked “understanding, compassion and efficiency”.