According to Paul Sims of the Daily Mail, The Rev Robert Harrison's book, Must Know Stories, contains retellings of ten Bible stories and is out tomorrow.
In the nativity story, Jesus is born in an overcrowded house instead of a stable, amid family conflict as Joseph's aunt deals with the fact that he and Mary are not even married.
Mr Harrison, who preaches at St John's in Hillingdon, West London, added: "It's better to tell the story controversially than not at all."
A Church of England spokesman said: "Robert Harrison is simply drawing parallels between biblical stories and situations that people may recognise in modern life.
"It doesn't change the original stories."
But last night some notable Christians disagreed.
Catholic MP Ann Widdecombe said: "It sounds to me as if it's gone much too far. It is one thing to give a biblical story a modern application and something quite different to distort all the facts."
Dr Justin Thacker, head of theology at the Evangelical Alliance, said: "In trying to communicate the stories to a contemporary audience some of the essential features and message may have been lost."