Communities Secretary Eric Pickles has urged councils not to give special tax breaks running into hundreds of thousands of pounds to the Church of Scientology.
Mr Pickles said he did not believe the majority of voters would want their councils to give favoured tax treatment to the organisation, whose celebrity members include actor Tom Cruise.
He said local authorities should take account of the rulings of the Charity Commission, which in 1999 rejected an application for registration as a charity after finding that Scientology was not a religion.
According to The Guardian, at least four authorities - the City of London, Westminster, Birmingham and Sunderland - have given rate or tax relief to the church in relation to buildings in their areas.
In a statement on Friday night, Mr Pickles said: "Tolerance and freedom of expression are important British values, but this does not mean that the likes of Church of Scientology deserve favoured tax treatment over and above other business premises.
"The Church of Scientology is not a registered charity, since the Charity Commission has ruled that it does not provide a public benefit. Nor are its premises a recognised place of worship.
"Councils may award charitable relief. They should take into consideration the Charity Commission's rulings when weighing up whether to do so.
"I do not believe the majority of the public would want their own council to be giving special tax breaks to such a controversial organisation."
A Church of Scientology spokesman told The Guardian: "Scientology is very popular with those who have visited our churches, met with Scientologists and observed or utilised our numerous community activities that effectively address drug abuse, illiteracy, declining moral values, human rights violations, criminality and more.
"Local council authorities, Government bodies in this country and many others, and the European Court of Human Rights have all recognised the religious nature of Scientology or the fact that Scientologists are actively helping those in their communities as a direct reflection of their religious beliefs."