(Reuters) - A federal judge has temporarily exempted Hobby Lobby Stores Inc from a requirement in the 2010 healthcare law that it offer workers insurance coverage for birth control, which the retailer said violated its religious beliefs.

The preliminary injunction issued by U.S. District Judge Joe Heaton in Oklahoma City, where Hobby Lobby is based, covers the arts and crafts chain and its affiliated Mardel Christian bookstore chain.

He put the case on hold until October 1, giving the federal government time to decide whether to appeal.

"There is a substantial public interest in ensuring that no individual or corporation has their legs cut out from under them while these difficult issues are resolved," Heaton said at a hearing, according to the Becket Fund for Religious Liberty, a nonprofit law firm representing Hobby Lobby.

A U.S. Department of Justice spokesman had no immediate comment. The government has said contraception coverage is needed to promote public health and gender equality.

The Green family, which owns Hobby Lobby, said that providing coverage to workers for the morning-after pill and similar contraceptives violated its Christian beliefs.

It also said it could have under Obamacare faced $1.3 million in daily fines by not providing such coverage. Hobby Lobby has 556 stores in 45 U.S. states.

On June 27, a federal appeals court in Denver let Hobby Lobby challenge the mandate on religious grounds, and said there was a good chance the company would prevail.

It said Hobby Lobby had "drawn a line at providing coverage for drugs or devices they consider to induce abortions, and it is not for us to question whether the line is reasonable."

The Becket Fund said there are 63 lawsuits challenging the mandate. It called Heaton's decision a victory for "the religious liberty of all for-profit businesses."

The case is Hobby Lobby Stores Inc et al v. Sebelius et al, U.S. District Court, Western District of Oklahoma, No. 12-01000.

(Editing by Gerald E. McCormick and Andrew Hay)