The political pressure in Scotland to scrap the Act of Settlement, which bans Catholics from becoming monarch, has increased with the Secretary of State for Scotland, Mr John Reid, saying the act "must be ditched".
The 300-year-old Act of Settlement bars Catholics from the throne and forbids the monarch to marry a Catholic.
Intended to ensure the Protestant ascendancy in the 18th Century, the act is now seen as pointlessly offensive.
The campaign to have parts of the act repealed is the first instance of Scotland's newly devolved parliament in Edinburgh influencing the political agenda of the UK.
The initiative has been lead by Mr Mike Russell, a Scottish National Party member of the devolved parliament.
The Prime Minister, Mr Blair, said last week "the government has no plans to repeal the act" as it would too "complex".
Comments by Mr Reid suggest this position might have shifted under the weight of popular opinion.
"I recognise the discrimination inherent in the Act of Settlement is offensive to many," Mr Reid told the House of Commons, adding "I haven't said, and nor has the Prime Minister, that changes can't be considered in the future."
The Scottish parliament has no powers to affect the Act of Settlement, but Mr Russell's motion condemning the Act has ignited the issue.
He has support from the Conservative Party with the former ministers, Lord Forsyth and Lord Carmyllie, tabling a motion in the House of Lords last week calling for the Act to be repealed.
Downing Street has denied that the government is in turmoil over the issue, with statements repeatedly referring to the fact that Mr Blair's wife and children are Catholic.
Mr Russell called for swift action on the matter. "The vast consensus is that this should be changed. You can't now put the genie back in the bottle over this matter."
Scotland's most senior Catholic, Cardinal Thomas Winning, has called for the discriminatory parts of the Act to be repealed. He welcomed the Secretary of State's comments and suggested that there was no need to rush through new legislation.
"We've already put up with this embarrassing legislation for almost 300 years. Another short delay is not going to make much difference," Cardinal Winning said.