The row over faith schools was reignited today by a report warning that the state system is failing Muslim pupils.
More Islamic schools should receive Government money, says the report from several Muslim groups.
But that goes against the advice of a Commons committee which warned that faith-based schools fuel division and conflict.
Labour peer Baroness Uddin said the report identified "a number of difficulties" with the way Muslim pupils were treated.
Pakistani and Bangladeshi children, who make up the biggest minority of Muslims in this country, are not achieving their potential, Lady Uddin told BBC Radio 4's Today programme.
"There are not that many teachers, there are not that many governors, there are not that many policy makers who are of Muslim faith," she said.
"It feels that there is a gap in the education system."
Lady Uddin said it was an "extremely tenuous argument" to say faith schools were to blame for social divisions.
Funding
Existing Islamic schools should be able to get Government funding in the same way that Jewish schools have, she said.
"We have to be very clear about why we are arguing that there is a problem about having faith schools only when the application for quite a number of schools that have been Muslim faith-based schools asking for recognition from the state," she added.
But MP Andrew Bennett, Labour chair of the Commons committee, said Northern Ireland demonstrated the dangers of faith-based schools.
"Children live totally parallel lives. You start off with separate school, then you end up with separate health centres, you end up with separate supermarkets," he told Today.
"What we want is for children to have a good understanding of each other's culture and separating them in schools is not going be a good idea."
The funding of state Jewish schools was a "historical situation", said Mr Bennett, adding: "What we don't want to do is make it worse."

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...and what would happen if our English children were in Pakistan? Do they invest more money for other religions at school??? Surely if Children are brought up in England, they are English and should learn our English ways!!!
What a fantastic way of ensuring that Asian communities can create their own nation within a nation. This way they do not have to integrate into mainstream society. This will create further division and an increase in sectarianism. No wonder the support for the BNP is growing!!
When in Rome, do as the Muslims do - speak your own language and don't integrate.
Instead of learning about extreme Islam in the local mosques, they will be able to learn it in schools too - which will assist in turning Britain into an Islamic state.
I will be in favour of Muslim schools when Islamic countries begin to fund schools for Christians and Jews. In most of these states it is forbidden to erect churches and even wear a cross! Most private muslim schools in this country have very poor accademic results.
Self imposed apartheid, unbelievable!
Let's skip by the nationist rhetoric for a minute.
This has nothing to do with "Pakistani" schools, and everything to do with the dubious nature of faith schools as a whole.
The notion of schools which educate and pander to one faith is counterproductive to a multicultural society.
This goes for Jewish schools, Catholic schools...anglican schools. You cannot expect a child who goes to such places to have a balanced view on other cultures, because their own is the only "approved" version. This creates religious elitism in a modern society which tolerates all religions. V. Bad.
At the end of the day, a secular education system is the only one which can guarantee some progress towards tolerance and multiculturalism
Simple answer to that one. Its our country, if they dont like it, go home.
The system is failing everybody. What makes them any different? If anybody doesn't like it, they are, we are told, Europeans and can go elsewhere. Try Spain, France or the eastern parts of Europe or go to a Moslem country if that is the society you desire. Perhaps they could open and finance their own school.