I really hope the Government stand firm on this. The Catholic Church are wrong on this issue. There is no logical reason why being gay should make someone a worse parent than someone straight. Parenting is a skill certainly, that people learn by doing. Like every skill, some people are better at it than others. But it is a skill that both men and women are capable of doing. Gender is irrelevant. And if gender is irrelevant, so is the sexual preference of a parent.
Therefore, to discriminate against a possible adopting or foster parent because of a three thousand year-old rule - and only that, is illogical and wrong. If the Catholic Church wish to cease operating adoption agencies because they don't like the rules, then that is their decision. They must then live with the consequences of their actions. The law of the land tries to codify equal treatment for everybody regardless of what nature has endowed them with. Churches do not deserve, nor should expect, exemption from the law.