A bitter Cabinet row over the new religious hatred laws has been laid bare in private correspondence between the Attorney General, Lord Goldsmith, and the Home Secretary, John Reid, passed to The Independent on Sunday.

The acquittal of Nick Griffin, the BNP leader who called Islam "a wicked, vicious faith", exposed a loophole in British race hate laws earlier this month.

But the Cabinet is divided over whether, with the 2006 Racial and Religious Hatred Act, the Government has done enough to close the gap.

Now a letter from Lord Goldsmith makes clear that the Attorney General agrees with senior ministers such as Gordon Brown who want the Government to admit that the new Act is practically useless.

The Attorney General's letter - dated 15 November - informs Mr Reid that the Crown Prosecution Service believes Mr Griffin would have walked free, even he had been if prosecuted under the new Act.

"Our judgment is that the new religious hatred law would not have assisted the prosecution here. This is because the law was so diluted in its passage through Parliament."

He points out that Mr Griffin had not used "threatening" words, as required by the 2006 Act, which insists on "proof of intent to stir up religious hatred" and includes wide "freedom of expression" provisions.

Lord Goldsmith tells Mr Reid bluntly that "the 2006 Act will have a very limited impact on this when it comes into force".