Religion is losing its grip - but it won't bow out without a fight. That was philosopher AC Grayling's take on the current "bad tempered" and "tense" debate between faith groups and secularists.

We can see it in religious groups lobbying for more state help for faith schools and in demands to be exempt from discrimination laws, he told his sell-out Hay Festival crowd. The Islamist movement with its fanatical minority willing to resort to violence is also a product of traditional beliefs feeling under threat.

But why, he asked, do faith groups deserve more help than say political parties or trades unions? "These are self selected interest groups," he said, "We wouldn't think of giving tax dollars to the conservative party to have schools for their children."

There is antagonism on both sides, he said, admitting with mock sheepishness that he has doled a fair bit of it out himself. But he said the special place religion has in the public debate must be challenged.

"The bad tempered part comes from the fact that the amplifiers that the religious people have got are much bigger than the non-religious people have got," he said. We must take those loud hailers away, he said.

This was familiar, well-loved territory for the Grayling faithful and they lapped it up, but is this really evidence, as he argued, that religion is on the way out?

Here Grayling reached for history and two periods when religion has been at its most antagonistic. One was the intellectual violence inflicted by the church on Darwin in the late 19th century. The other was the post-reformation wars in Europe in the 16th and 17th centuries as Rome lost its grip on the continent. Violence between Catholics and Protestants left central Europe ravaged and millions dead. In both cases, religion was under threat.

"That was the result of the death of a religious hegemony that didn't want to die," said Grayling. Are we witnessing the same thing now?

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