Everyone from Richard Dawkins to Sarah Palin seems agreed that the King James Bible is Basically A Good Thing and wishes it many happy returns. It's more majestic than modern translations, easier to follow than Shakespeare, has enlivened English by translating Hebrew idiom literally, and is the genesis of 257 phrases that you use every day. (Don't say you don't. You do.)

But the King James Bible has also had a terrible effect on religious language, from which English-speaking churches are only now fully recovering. For centuries, it persuaded Christians, when talking to or about God, to drop normal English in favour of cod Jacobean. What better way could there be to show that Christianity is an outdated cultish fringe with nothing of use to say to contemporary society? Ruffs and morris dancing, possibly, but it would be a close-run thing.

The obvious example is the grammar of "thee", "thou hast" etc. English must be the only language to have developed a different grammar for the second person deity. But there are all kinds of other verbal timewarps too. Being a churchgoing child in the 1970s in London and Cardiff, I'd hear prayers from the older generation peppered with sentences from a parallel universe like: "Vouchsafe unto us, we pray thee, thy manifold mercies, O Lord", in which "us" and "we" are just about the only modern usages. Zounds, 'twas merry Sabbath morn, methinks not.

Shakespeare casts just as long a shadow over his field, but Beckett and Pinter didn't feel the need to fill their plays with forsooths and hey nonny nonnies. And yet in post-war England people were still writing hymns like How Great Thou Art. A specially execrable example was the 1970s song It's No Longer I that Liveth, but Christ that Liveth in Me, showing that those who couldn't manage the grammar felt compelled to use it.

In part, to be fair, the problem is that the King James Bible was simply a victim of its own greatness. Its style is so commanding that it permeated the idiom of those for whom it was daily bread, and made churches resistant to the idea of new translation. And of course there is something inherently conservative about religious culture, hence the survival of dog collars, harvest festival and misogyny.

But there's more to it than that. Modern King Jamesish actually turns 17th-century English on its head. In 1611, "thee" and "thou" were not more exalted ways of addressing someone but quite the opposite. "You" was more formal, "thou" more familiar. You can see this in the translators' address to King James at the start of the Bible, which addresses him as "you" throughout.

But in the text of the Bible, the translators completely ignored this distinction. They wanted to translate the Hebrew and Greek as literally as possible, and neither language makes a distinction between you formal and you familiar. Instead they distinguish between you singular and you plural. So the translators revived the old rule of "thou" for singular – whether to God or a harlot – and "you" for plural.

This means that, on the one hand, the language of the King James Bible was already somewhat archaic in 1611, so the translators are perhaps not entirely without blame for its fossilising effect on language. On the other hand, they made the language of the Bible more egalitarian than their everyday language. So it's ironic that their decision that even God should be addressed merely as "thou" created a new jargon of pious grandiloquence.

You can see the process under way in the work of the Wesleys in the 1730s. John's pamphlets are some of the most modern-sounding writing of the period, but his sermons and Charles's hymns are written entirely in the obsolete grammar of the English Bible. And you can see it still going strong in TS Eliot, who for all his modernism, when he got religious felt the need – if inconsistently – to get Jacobean: "O Light Invisible, we give Thee thanks for Thy great Glory". So tight was the KJB's grip on Christian language that even some modern translations, such as the Revised Standard Version (1946-52), kept the thees and thous for addressing God.

Modern English translations are often slightingly compared to the King James, unfairly so. If they don't share its sonority, that's because they're in modern English. Philip Larkin and Ted Hughes don't share the sonority of Shakespeare, for the same reason, but that's rarely held against them. There's no way of putting, "Thou art the man" or, "Our father which art in heaven" in equally resonant contemporary English. Modern versions have chosen accurate translation and good communication over staying in the 17th century.

The petrifaction of religious language has happened over and over – Catholic Latin, Orthodox Slavonic. In each case it started with people wanting to communicate in today's language, who did it so well that churches still held on to the language long after it failed to communicate anything any more. It's to the credit of the English-speaking churches that they have refused to let that happen to the King James Bible.