David Cameron has urged  a revival of traditional Christian values to counter the country's "moral collapse".

In a rare foray into religious issues, the Prime Minister said the values of the Bible "go to the heart" of what it means to be British.

Urging the Archbishop of Canterbury to "keep on the agenda which speaks to the whole country", he said the head of the church had every right to engage in political debate.

Addressing senior Church of England clergy at an event to mark the 400th anniversary of the King James Bible, Mr Cameron said "live and let live" had too often become "do what you please", as people shied away from saying things were right and wrong.

This "passive tolerance" of immoral behaviour had helped fuel the summer's riots, excess in the City, MPs' expenses abuses and Islamic terrorism, he said,  confessing to being only a "vaguely practising" Christian who was "full of doubts" about big theological issues. But he insisted: "We are a Christian country. And we should not be afraid to say so."

The church and the Bible were "inherently involved in politics" because it involved many moral questions, he said, addressing directly recent criticisms of coalition policy by Dr Rowan Williams.

"I certainly don't object to the Archbishop of Canterbury expressing his views on politics. Religion has a moral basis and if he doesn't agree with something he's right to say so.

"But just as it is legitimate for religious leaders to make political comments, he shouldn't be surprised when I respond. Also it's legitimate for political leaders to say something about religious institutions as they see them affecting our society, not least in the vital areas of equality and tolerance.

"I believe the Church of England has a unique opportunity to help shape the future of our communities. But to do so it must keep on the agenda that speaks to the whole country."

Mr Cameron made clear that he was not suggesting that having a different faith, or none, "is somehow wrong". "But what I am saying is that the Bible has helped to give Britain a set of values and morals which make Britain what it is today. Values and morals we should actively stand up and defend.

"The alternative of moral neutrality should not be an option. You can't fight something with nothing. Because if we don't stand for something, we can't stand against anything."

Addressing the often vexed question of whether politicians should speak about religion, he went on: "People often say that politicians shouldn't 'do God'. If by that they mean we shouldn't try to claim a direct line to God for one particular political party, they could not be more right.

"But we shouldn't let our caution about that stand in the way of recognising both what our faith communities bring to our country, and also just how incredibly important faith is to so many people in Britain."

Mr Cameron dismissed the idea that "being a Christian country is doing down other faiths", saying people had told him it was easier to be Jewish or Muslim in Britain than in a secular country like France because Christianity demanded tolerance. "And because many of the values of a Christian country are shared by people of all faiths and indeed by people of no faith at all."

Mr Cameron said faith in itself was not sufficient to ensure morality but it could be a "helpful prod in the right direction...Whether inspired by faith or not - that direction, that moral code, matters," he added.

"Whether you look at the riots last summer, the financial crash and the expenses scandal, or the ongoing terrorist threat from Islamist extremists around the world, one thing is clear: moral neutrality or passive tolerance just isn't going to cut it any more. Shying away from speaking the truth about behaviour, about morality, has actually helped to cause some of the social problems that lie at the heart of the lawlessness we saw with the riots.

"The absence of any real accountability, or moral code, allowed some bankers and politicians to behave with scant regard for the rest of society. And when it comes to fighting violent extremism, the almost fearful passive tolerance of religious extremism that has allowed segregated communities to behave in ways that run completely counter to our values has not contained that extremism but allowed it to grow and prosper, in the process blackening the good name of the great religions that these extremists abuse for their own purposes.

"Put simply, for too long we have been unwilling to distinguish right from wrong. 'Live and let live' has too often become 'do what you please'. Bad choices have too often been defended as just different lifestyles."

Mr Cameron reiterated his call for "muscular liberalism", a society that "believes in certain values and actively promotes them". He urged the church and other faiths to get involved in achieving the goal.

"I believe the church - and indeed all our religious leaders and their communities in Britain - have a vital role to play in helping to achieve this," he added. The future of our country is at a pivotal moment. The values we draw from the Bible go to the heart of what it means to belong in this country. And you, as the Church of England, can help ensure that it stays that way."