Proposed federal anti-discrimination laws are a threat to fundamental freedoms and could trigger a huge increase in complaints of bias, driving up costs for business and government, NSW Attorney-General Greg Smith has warned.

In a strongly worded letter that echoes the concerns of the other two conservative states, Victoria and Western Australia, Mr Smith urges his federal counterpart Nicola Roxon to leave the anti-discrimination regimes of the states intact.

"The consolidated legislation may very considerably increase the regulatory burden and cost to business (and) diminish core democratic freedoms of speech, conscience, religion and association," Mr Smith claims in the letter, which has been provided to The Australian.

He argues the new laws could override exemptions in NSW offered to religious groups and independent schools, forcing them to employ gay or transsexual teachers or priests.

As Western Australia and Victoria share many of NSW's concerns over Ms Roxon's proposals, the conservative states emerge as the latest obstacle to the reforms.

Along with Mr Smith, Victorian Attorney-General Robert Clark and WA's Christian Porter have written to Ms Roxon asking for the anti-discrimination laws and their effect on the states to be put on the agenda of the next meeting of state and federal law ministers in April.

Mr Porter warned yesterday: "What has been proposed to date by the federal Labor government looks a lot like a bill of rights by stealth and that is not something the WA Liberal-National government would be likely to support.

"In reality, it's something the wider Australian population has already rejected, which is why Labor scrapped its bill of rights plan in the first place."

Late last year, Ms Roxon released a discussion paper on the changes, which merge four commonwealth anti-discrimination acts into a single regime. She plans to deliver on an election commitment by the Gillard government to prohibit discrimination on the grounds of sexual orientation and "gender identity".

The paper goes further, including religion, political opinion, "domestic violence victim status", nationality and criminal record among "protected attributes" that could trigger claims of bias.

It says exemptions offered to religious organisations will be maintained, apart from those connected with "sexual orientation or gender identity". As a result, Mr Smith warns that "the exemptions provided to private/independent schools under NSW anti-discrimination law could be overridden by the proposed commonwealth legislation".

On Monday, The Australian reported business concerns that the proposals would encourage employees to pursue "speculative claims" in the hope of a payout.