The Scotsman reports that the Church has also vowed to create "gay rights martyrs" if the gay rights laws are passed.
Instead of closing down Church adoption agencies as mooted previously, the agencies plan to deliberately break the law in order to bring a case to court.
The Church believes it could then challenge a guilty verdict through Article 9 of the Human Rights Act, which upholds the freedom of religious expression, the Scotsman says.
"We will not shut down the agencies. We will carry on working until someone takes us to court for breaking the law," a spokesman for the Church told the paper.
"There would then be a case where one of our agencies would be found guilty of breaking the law and would be put out of business."
"We believe there is an opportunity for a judicial review on the grounds that compelling people to act against their religious beliefs contravenes Article 9 of the ECHR."
The plan follows a similar challenge brought against the government in Northern Ireland, where the act has already been introduced. Brought by the Christian Institute, the bid will go ahead in March, in an attempt to topple the regulations in the Province.
The Church is now also warning of other examples where its members may find themselves breaking the new legislation. Once passed, the Equality Act, will ban any discrimination in the provision of services on grounds of sexuality.
"We will see priests prosecuted for saying they are not renting the hall for a same-sex celebration," the spokesman added.
Reuters quoted Prime Minister Blair as saying that the adoption agencies will be granted a transition period, until the end of next year, to adjust to the new law, he said.
"Everyone is agreed that, above all, the interests of the child and particularly the most vulnerable children, must come first," Blair said in a statement.
"I believe we have now found a way through that achieves this and which all reasonable people will be able to support."
But he also insisted that he supports "the right of gay couples to apply to adopt like any other couple".
The UK Telegraph quoted Westminster Cardinal Cormac Murphy-O'Connor as expressing disappointment.
However, the British church head endorsed Mr Blair's desire to ensure that adoption expertise in the Catholic sector was transferred to secular agencies, rather than being lost altogether.
"It is clear from the Prime Minister's statement that he has listened to some of the concerns of the Catholic Church in regard to its adoption agencies," he said.
Blair overrules Church on gay adoption (The Age, 31/1/07)
Church: we'll make gay rights martyrs (Scotsman, 30/1/07)
UK law overrules church objection to gay adoptions (The Age, 31/1/07)
LINKS (not necessarily endorsed by Church Resources)
Cardinal Cormac Murphy-O'Connor (Roman Catholic Diocese of Westminster
Cormac Cardinal Murphy-O'Connor (Wikipedia)
10 Downing Street website
Cardinal warns British govt over gay adoptions (CathNews, 24/1/07)
Family institution under attack, says Vatican document (CathNews, 6/6/06)
Pell prepares for fight on gay adoption (CathNews 1/5/06)
Scottish Catholics seek opt-out on adoption laws (CathNews 18/1/06)
Church concerned for adopted children of same-sex couples (CathNews 25/7/05)
31 Jan 2007