Mr Dixon has also ordered his department to revise its new guidelines on religious activities in schools saying he never intended a ban on student-led prayer groups.

A new ministerial direction, which came into effect this term, said parents must clearly ''opt-in'' if they want their children to attend special religious instruction.

It also says if principals determine there are insufficient resources – such as inadequate teachers to supervise students – special religious instruction will not be delivered at the school.

The Age understands the government did not intend to make any other changes to the way the program was run.

However the education department's new guidelines went further than Mr Dixon's ministerial direction.

Christian groups complained they meant even student-led prayer groups at lunch time were prohibited and the distribution of bibles banned.

And a growing list of schools have ''dumped'' special religious instruction following the ministerial direction, according to lobby group Fairness in Religions in Schools, which has campaigned to remove the controversial program from state schools.

"The trend we are seeing of parents voting with their feet, now that they know what SRI is all about, has been remarkable," spokeswoman Lara Wood said.

Twelve of the 37 schools that offered Jewish special religious instruction have withdrawn the program this term.

"The flawed implementation of the recent changes has meant that many hundreds of children are being denied a Jewish education," United Jewish Education Board president Yossi Goldfarb said.

A spokeswoman for Mr Dixon said the minister had met with the United Jewish Education Board and other groups.

"The minister expressed concern that schools may not be delivering special religious instruction as required under the legislation and the ministerial direction," she said.

"The minister has asked the department to get an explanation from schools that no longer offer special religious instruction or have experienced a significant decrease in student enrolment since the ministerial direction came into effect.''

The new education department policy stated prayer groups, youth groups, clubs, information sessions or workshops "would constitute promotion of specific religions in schools outside Special Religious Instruction and are not permitted''.

Mr Dixon has ordered his department to revise this to better reflect his ministerial direction.

The amended guidelines will make it clear that student-led prayer can continue at schools and no group working with schools will be discriminated against because it is a religious organisation.

Australian Christian Lobby Victorian director Dan Flynn said he welcomed the announcement the education department had ''over reached'' and the ban on student-led prayer groups and exchange of religious texts would be withdrawn.

Andi Lentin, whose two children go to Caulfield South Primary, was disappointed when the school  stopped offering Jewish special religious instruction this term.

''We keep a very traditional Jewish home and our children learn Hebrew,'' she said. ''We elected to go to a government school because we wanted them to be part of the community. One of the benefits of Jewish SRI is that they have met other kids they didn't know were Jewish at school.''

Ms Lentin said many parents had not received the forms asking parents to opt-in to special religious instruction at the end of second term – she discovered her own child's form crumpled at the bottom of a school bag.

"Our greatest disappointment is the process the school went through – it seems like the principal made this decision without any consultation."

But principal Gayle Yardley said the school went to great lengths to ensure parents understood the new policy and had adequate time to return the consent form, including reminders in two consecutive newsletters.

Ms Yardley said only 200 out of the 470 students had consent to participate in either Jewish or Christian special religious instruction, which meant the school was unable to ensure all students were supervised.

"I advised parents that the decision to not offer Jewish and Christian SRI in the second half-year was based solely on low student participation. I also advised them that the program would be re-offered again in 2015."

The state government is understood to be working with the United Jewish Education Board, Christian provider Access Ministries and other special religious instruction providers to work through any ''unintended consequences'' of the new policy on a case by case basis.

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