Home Office minister Hazel Blears is facing an angry backlash over comments that Muslims should accept they are more likely to be stopped and searched by police.
She said that because laws were geared to dealing with Islamic extremists, innocent Muslims will inevitably be disproportionately targeted.
Massoud Shadjareh, chair of the Islamic Human Rights Commission, said Ms Blears' comments would be "music to the ears of racists".
Mr Shadjareh, who sits on an advisory panel on stop and search set up by the Home Office, accused the minister of "playing an Islamophobia card" in the run-up to the general election.
Inayat Bunglawala, spokesman for the Muslim Council of Britain, suggested Ms Blears was "scaremongering" to help get controversial anti-terror laws allowing "control orders" on terror suspects on to the statue books.
He added: "Her comments are thoroughly unhelpful at a time when British Muslims are undeniably facing a growing climate of Islamophobia.
Ms Blears made the comments during the all-party Home Affairs Select Committee's inquiry into the effect anti-terror powers have had on community relations.
She told MPs: "The threat is most likely to come from those people associated with an extreme form of Islam, or who are falsely hiding behind Islam. It means that some of our counter-terrorism powers will be disproportionately experienced by the Muslim community.
"I think that is the reality and I think we should recognise that. If a threat is from a particular place then our action is going to be targeted at that area."
Figures published last week showed blacks and Asians were increasingly likely to be targeted by police stop and search.