The Manitoba Public Schools Act, passed in 1890, secularized public education in Canada by withdrawing all public funding from sectarian Catholic and Protestant schools. This led to a controversy that spread across Canada. Since Canada was part of the British Empire at the time, this controversy also spread to Britain.
This controversy was based in part on the (federal) Manitoba Act in 1870, which stated that the province could not pass any law that "prejudicially affect any right or privilege with respect to Denominational Schools which any class of persons have by Law or practice in the Province at the Union.” Many argued the enforced secularization of schools violated this act. Others said Manitoba's right to self-determination granted them the right to arrange the school system as they choose.
In general, the leaders of Great Britain supported the Public Schools Act, as they valued secular education and in particular feared Catholic schooling would give the Catholic Church undue influence over the people of Canada. They were willing to give up the opportunity for Protestant denominational education if it protected against the perceived danger of Catholic denominational education.
Aside from the Catholic/ Protestant issue there was also a French/ English issue, as the Public Schools Act also established the language of teaching would be English and not French. This was also a provision that most leaders in Britain supported, as they feared the French gaining power over Canada.
This made the Manitoba Schools Act a complex jurisdictional issue: Manitoba could potentially be overruled by Canada, but then Canada could be potentially overruled by Great Britain.
A compromise was attempted that allowed limited religious instruction in secular schools, but this satisfied neither side. The issue was brought to court, where the Public School Act was ruled legal, but this did not end the controversy either.
After a shakeup that ousted the Conservative Party majority in favor of the Liberal Party, a new compromise was struck. This compromise allowed for the funding of denominational and/ or bilingual education if a school had enough families that desired it. It was treated as a question of individual liberty, rather than the liberty of institutions.
Even this compromise only lasted about 20 years before it collapsed and a new solution was needed.