Olympic swimming champion Ian Thorpe has led advocates in increased calls for the federal government to dump its religious discrimination bill.

Mr Thorpe, Australia’s greatest Olympian and an LGBT+ advocate, said the controversial bill had “no friends” in parliament and urged the government to “make it disappear”

“What this is, is it becomes a state-sanctioned discrimination,” Mr Thorpe said in Canberra on Tuesday..

“To give rights for … people while excluding another group of people, for me, is discrimination. And with that, we should consider what this place that we are in, what it represents and how it represents each and every one of us.”

Mr Thorpe was in Canberra with a delegation from Equality Australia, and was expected to meet MPs before the bill’s return to the lower house.

But it came as the Coalition was unable to agree on Tuesday on proposed amendments to the bill that would still allow religious schools the right to expel transgender students, with only gay students offered protection from such expulsion.

Protections for LGBT+ students at risk of being expelled from religious schools was a key concern among moderate Liberals examining the legislation, with some threatening to cross the floor when debate resumes in parliament this week.

Mr Thorpe was joined by transgender year 12 student Olivia, who said she was subjected to “direct discrimination” from a former school after she came out.

“They told me I was very likely to be bullied by people … that my twin brother in the same year at the school would also be bullied. They told us that his leadership potential would be jeopardised,” she said.

“They said that if I would just leave this term, I would not have to pay the rest of the term’s fees. This left me without a school going into the new year and with nowhere to go.”

The Coalition party room met on Tuesday morning to discuss amendments to the bill.

The meeting was adjourned to allow members to attend speeches acknowledging workplace harassment and bullying in Parliament House, without an agreement being reached. It was expected to reconvene after question time.

Finance Minister Simon Birmingham had earlier on Tuesday confirmed the amendments would not provide protections on the basis of gender identity.

“The proposal that is put forward is to repeal the exemption as it relates to students being exempted from the Sex Discrimination Act on the basis of their sexual orientation. Now it doesn’t go further than that,” he told ABC Radio.

Prime Minister Scott Morrison has been trying to win over his party room for the contentious laws, with debate resuming in the lower house on Tuesday.

Mr Morrison said he was confident the bill would pass parliament, despite the opposition from within his own ranks, and denied transgender students would not be able to be expelled from religious schools.

“This bill does not seek to endorse that arrangement. That’s an existing law. What we’re dealing with today are not those matters,” he said.

Liberal MP Angie Bell indicated she would now support the bill, having previously said she would not vote with her government colleagues without the amendments.

Labor frontbencher Tony Burke said the government should honour a commitment that all school students be protected, not just on the basis of sexuality.

It comes after Liberal backbencher Bridget Archer said she would cross the floor on the issue should it come to a vote, due to a lack of protections for students.

The proposed bill would shield people expressing their religious beliefs, even if these are considered offensive or insulting, as long as they don’t amount to harassment, vilification or threats.

The bill is also designed to override state laws that limit when religious schools can preference hiring people of the same faith.

-with AAP