End gay discrimination in schools: Hinch

Any school that discriminates against gay students and teachers should be stripped of government funding, senator Derryn Hinch says.

Derryn Hinch says schools that discriminate against gay students should be denied funding. (AAP)

Derryn Hinch has demanded the federal government refuse to fund any religious school which discriminates against gay students or teachers.

Senator Hinch also wants any school that engages in discrimination on the basis of sexuality denied charity tax concessions, as the government looks to remove student exclusion powers for faith-based organisations.

"The fact that taxpayers' money is going to fund these schools is wrong," the Victorian independent senator told parliament on Monday.

But a motion to suspend the normal business of the Senate to vote on Senator Hinch's motion was voted down 31-30.

The issue blew up last week when parts of a review of religious freedoms were leaked.

The review, led by former attorney-general Philip Ruddock, did not recommend the removal of existing laws allowing faith-based schools to discriminate on the basis of sexuality.

Government Senate leader Mathias Cormann said the government would properly consider the whole review before releasing the rest of its response.

"These are sensitive matters on which good Australians can have a diversity of genuinely and sincerely held views," Senator Cormann said.

Senator Hinch's fellow crossbencher David Leyonhjelm said he wouldn't support the motion because it hadn't followed usual upper house processes.

The debate on discrimination ate into the time to debate Senator Leyonhjelm's private bill to legalise cannabis.

"It is posturing, it is virtue signalling, it is blowing hard. The only thing missing from it is 'shame shame shame'," the Liberal Democrats senator said.

Centre Alliance signalled they would have supported Senator Hinch's calls to strip funding from discriminatory schools if the motion was put before parliament in the usual way.