London, England - Government cash will be withheld from any Muslim group that fails to tackle extremists, Communities Minister Ruth Kelly announced today.
Moderate Muslims could no longer "sit on the sidelines" and "pay lip service" to the fight against terrorism, Ms Kelly said in her first major speech on the role of Islam in Britain.
There had to be a "fundamental rebalancing of our relationship" with all Islamic groups, she added, pointing out that many Muslims privately praised Britain's openness for allowing their religion equal access to the armed forces, police and Parliament.
But she said the Muslim community had a great responsibility to use its influence to curb the rise of radicalism and she had decided to change the rules on funding and grants accordingly.
"In future, I am clear that our strategy of funding and engagement must shift significantly towards those organisations that are taking a proactive leadership role in tackling extremism and defending our shared values.
"It is only by defending our values that we will prevent extremists radicalising future generations of terrorists."
Ms Kelly said cash would go to goodquality teaching of and about Islam in schools for all faiths and to imams and mosques that were in touch with young people. Other projects that would be backed were "strong leadership programmes for young people; projects that engage and empower women; deradicalisation programmes and diversionary activities."
Ms Kelly said that she knew that her message would be "challenging for some", but added: "I make no apologies for that. The scale of the threat means doing any less would be a dereliction of our duty. It would be letting down those within your communities who are leading the fight against the extremists."