By Colleen Jenkins
WINSTON-SALEM, N.C. (Reuters) - A group of North Carolina public school students and their parents is asking a U.S. court to block two federal agencies from withholding education funding in a dispute over a state law mandating bathroom access according to birth sex.
The conservative Alliance Defending Freedom filed the complaint on Tuesday on behalf of a group called "North Carolinians for Privacy." It is the fifth lawsuit to seek judicial input on the law enacted in March.
The group said the U.S. Department of Justice and U.S. Department of Education had improperly held that provisions of federal law banning discrimination in education settings on the basis of sex apply to gender identity.
"The agencies must stop using falsehoods about what federal law requires to threaten student access to educational opportunities and financial assistance," Jeremy Tedesco, senior counsel for the alliance, said in a statement on Wednesday.
A spokeswoman for the Education Department referred questions to the Justice Department, which said it was reviewing the complaint.
The Alliance Defending Freedom, which opposes allowing transgender students to use bathrooms that correspond with their gender identities, filed a similar lawsuit last week against the same federal agencies and a suburban Chicago school district over such a policy.
The issue of whether transgender people deserve the same federal protections extended to blacks and religious minorities is already before courts in North Carolina.
The Justice Department sued the state on Monday, asking a federal district court to rule that North Carolina was violating the 1964 Civil Rights Act and order it to stop enforcing the ban.
Attorney General Loretta Lynch threatened to withhold federal funding to the 17-campus University of North Carolina system, which was named as a defendant in the lawsuit, while the legal case proceeds.
North Carolina stands to lose $4.8 billion in funds, mainly educational grants, if it does not back down, according to an analysis by lawyers at the University of California, Los Angeles Law School.
North Carolina's Republican governor and two legislative leaders also sued the U.S. government on Monday over the issue.
UNC President Margaret Spellings has said schools are caught in the middle.
"We intend to remain in close communication with state and federal officials to underscore our shared interest in resolving these difficult issues as quickly as possible so that we can refocus our efforts on educating students," she said in a statement on Tuesday.
(Additional reporting by Julia Edwards in Washington; Editing by Peter Cooney, Bernard Orr)