The Muslim Council of Britain hit back at the archbishop of Westminster for saying Muslim leaders were not doing enough to denounce activists who carried out attacks "in the name of Allah".
The Muslim leaders said they were "at a total loss" to explain the "wholly unjustified" accusation made by Cardinal Cormac Murphy O'Connor, head of the Catholic Church of England and Wales, on GMTV's Sunday programme.
A spokesman for the Muslim Council of Britain said it had clearly denounced terrorism, adding: "This denunciation has been duly resonated throughout the entire community.
"Continuing to beat the Muslim community with the stick of terrorism is not only unfair but may also impact negatively on otherwise good inter-faith relations in the country."
During the television programme the archbishop said he agreed with the former head of the Anglican Church, Lord Carey, who had "very bravely" criticised Muslim leaders for not saying more to combat those who might be attracted to terrorism.
Lord Carey had refused to apologise after causing outrage by criticizing Islam during a recent lecture in Rome.
The council, which groups some 250 associations, recently wrote to mosques across the country urging them to help police fight terrorism. It asked imams and community leaders to be alert for possible illegal activities and report potential terrorists.