The government has ordered schools in England not to use resources from organisations which have expressed a desire to end capitalism.

Department for Education (DfE) guidance issued on Thursday for school leaders and teachers involved in setting the relationship, sex and health curriculum categorised anti-capitalism as an “extreme political stance” and equated it with opposition to freedom of speech, antisemitism and endorsement of illegal activity.

Former shadow chancellor John McDonnell said the measures effectively outlawed reference in schools to key events in British history, and that it symbolised growing “authoritarianism” within the governing Conservative party.

The guidance, part of lengthy guidelines for implementing the statutory curriculum, said: “Schools should not under any circumstances use resources produced by organisations that take extreme political stances on matters. This is the case even if the material itself is not extreme, as the use of it could imply endorsement or support of the organisation.”

It listed examples of what were described as “extreme political stances”, such as “a publicly stated desire to abolish or overthrow democracy, capitalism, or to end free and fair elections”; opposition to freedom of speech; the use of racist, including antisemitic, language; the endorsement of illegal activity; and a failure to condemn illegal activities done in support of their cause.

McDonnell said: “On this basis it will be illegal to refer to large tracts of British history and politics including the history of British socialism, the Labour Party and trade unionism, all of which have at different times advocated the abolition of capitalism.

“This is another step in the culture war and this drift towards extreme Conservative authoritarianism is gaining pace and should worry anyone who believes that democracy requires freedom of speech and an educated populace.”

He added: “Imagine an educational system that banned schools from enlisting into their curricula teaching resources dedicated to the writings of British writers like William Morris, Iris Murdoch, Thomas Paine even. Well, you don’t have to. Boris Johnson’s government has just instructed schools to do exactly that.”

Barrister Jessica Simor QC suggested that the government has on occasion not complied with the guidance itself, after it admitted the new Brexit bill would break international law (“endorsement of illegal activity”) and continued selling arms to Saudi Arabia for use in Yemen following a court ruling that it was unlawful.

Tariq Ali, the writer and activist, said although the new guidance was a sign of “moral and political bankruptcy”, the advent of the internet meant such measures were futile.

“Leaving aside the stupidity, these things don’t work,” he said. “People will read what they want to read. Trying to enhance a version of the Prevent strategy, which is already in place, is quite scandalous and shocking.

“If you put things on a banned list, lots of young people can access them via the internet and read them. Banning them from schools will not work at all, aside from the fact it’s a sign of moral and political bankruptcy.”

He added: “How could both young and old people not read anti-capitalist analysis after 2008, or now with the virus going on and recessions looming all over the western world.”

It is understood that the DfE is clear that schools should not work with agencies that take extreme positions, including promoting non-democratic political systems, and that teachers should be politically impartial.

Minister for school standards Nick Gibb said: “Our new relationships, sex and health education (RHSE) guidance and training resources equip all schools to provide comprehensive teaching in these areas in an age-appropriate way.

“These materials should give schools the confidence to construct a curriculum that reflects diversity of views and backgrounds, whilst fostering all pupils’ respect for others, understanding of healthy relationships, and ability to look after their own wellbeing.”

It comes after counter-terrorism police earlier this year placed the non-violent group Extinction Rebellion on a list of extremist ideologies that should be reported to the authorities running the Prevent programme. However, the south-east division of Counter Terrorism Policing later recalled the document.

• The headline of this article was amended on 27 September 2020 because the Department for Education guidance applies to schools in England, not to schools in the UK as an earlier version mistakenly said.