Senior Conservatives last night sought to fight off Labour attempts to cast David Cameron as a "right-wing extremist", after a bold speech attacking multiculturalism provoked a furious political row.
In a critique of the "hands-off tolerance" of unacceptable practices by non-whites, the Prime Minister said the ideology which fuels terrorism had to be confronted head on. "At stake are not just lives, it's our way of life," he warned in his first major speech on the subject since the general election. "Frankly, we need a lot less of the passive tolerance of recent years and much more active, muscular liberalism."
Mr Cameron quickly faced accusations of "inflaming" racial tensions and found his speech applauded by the British National Party, which claimed it was confirmation of the party's policies.
Muslim groups, anti-racism campaigners and opposition politicians also questioned the timing of the high-profile speech, just hours before around 3,000 members of the far-right English Defence League (EDL) marched through Luton.
With dozens of coaches of EDL supporters from around the country descending on the Bedfordshire town – and counter-protests by left-wing and Muslim groups – all the ingredients were there for scenes of mass violence.
But the police lines held and the warring factions were kept apart; EDL stewards moved through the crowds under a sea of flags – most bearing the cross of St George – and "Islam is Evil" banners.
The rising temperature was reflected in the political row over the claim by Sadiq Khan, Labour's justice spokesman, that Mr Cameron's speech amounted to "writing propaganda for the EDL". The Tory party chairman, Baroness Warsi, said the attempt to "smear the Prime Minister as a right-wing extremist is outrageous and irresponsible". She said Mr Cameron had "made it clear he wants to unite Britain around our common values, and he has done so in measured language".
Downing Street sources were adamant that the speech at a security conference in Munich had been planned for months; to have cancelled it would have "let the EDL fill the vacuum with their extreme, right-wing views". Aides said the majority of the country wanted to have a "sensible argument on extremism".
Mr Cameron stressed that terrorism was not linked to "any one religion or ethnic group" and noted the threat still posed in Britain by dissident republicans and anarchist attacks in Greece and Italy. "We need to be clear: Islamist extremism and Islam are not the same thing."
But he suggested multiculturalism had led to communities becoming isolated, which left young Muslim men feeling "rootless". He added: "Under the doctrine of state multiculturalism, we have encouraged different cultures to live separate lives, apart from each other and the mainstream. We have failed to provide a vision of society to which they feel they want to belong. We have even tolerated these segregated communities behaving in ways that run counter to our values."
The counter-extremism think-tank the Quilliam Foundation said the speech was "very balanced". Liberty, the civil liberties and human rights group, supported "every fundamental right and freedom set out in his speech".
But critics claimed Mr Cameron's "inflammatory" remarks played into the hands of extremists by singling out Muslims and risked "feeding hysteria and paranoia about Islam". Supporters of Mr Cameron's criticism of multiculturalism were uneasy that he appeared to blame the concept for encouraging terrorist outrages.
Nick Lowles, director of the anti-extremist group Hope Not Hate, said Mr Cameron's comments were "unhelpful". "On a day when extremists are descending on Luton, these remarks are open to misinterpretation, at best, and, at worst, will inflame the situation," he said. "Whatever the intention, this is playing into the hands of those that wish to sow the seeds of hatred and division."
Mohammed Shafiq, of the Ramadhan Foundation, a British Muslim youth group, said Mr Cameron had risked angering Muslims by suggesting there was widespread intolerance within the religion. He said: "British Muslims abhor terrorism and extremism, and we have worked hard to eradicate this evil from our country. It would help if politicians stopped pandering to the agenda of the BNP and the fascist EDL."
As if to confirm these fears, Nick Griffin, the leader of the British National Party, applauded the speech. He said: "In rhetorical terms, I think it's a sign of the steady Griffinisation of British politics. We've had things that only I and the BNP have been saying for years.
"It's our message and our rhetoric which was demonised as beyond the pale and now it's mainstream."
Former Labour home secretary Jack Straw said most British Muslims "want the same for their families as everyone else, and subscribe to the same values, including an abhorrence of terrorism".
Luton Borough Council and Bedfordshire Police issued a joint statement, insisting different communities in the town were not "cut off from each other", as Mr Cameron had suggested was the case in some parts of Britain. "There are a tiny handful of people – of a variety of backgrounds – who have a message of extremism and hate. We have tried to tackle this through having dedicated youth and community workers showing people the consequences of their choices."
One of those watching the Luton rally was Wendy Twyman, a smartly dressed woman with blond hair and glasses – a far cry from the tattooed skinheads associated with the movement. The 54-year-old from Watford was there with her son, Lewis. "I used to live in Dubai and know how bad sharia law is. The EDL has got a voice and it's getting stronger."
Ryan Bishop, an EDL steward from Bristol, repeatedly claimed not to be against Muslims or Islam. Reeking of alcohol, the 25-year-old leaned closer and said: "I'm against hatred bred on our shores by a minority. We're not racist; we just want Islamist extremists dealt with."
As another cheer went up, an EDL steward turned to reporters: "Rid Britain of Islamic extremists and you'll get rid of the EDL. Simple."
Additional reporting by Emily Dugan and Jonathan Owen
Multiculturalsim – The Debate
"One of the best things the left has done is persuade more people racism is unacceptable. If the PM's speech is to succeed, it needs to be seen as a call for strong moderate British values to unite a nation."
John Redwood, Conservative MP
"Our diversity of cultures and faiths should be celebrated, not feared. We should be justifiably proud of that diversity, and develop relationships based on mutual respect and understanding."
Angus Robertson MP, Scottish National Party leader in Westminster
"David Cameron's assault on multicultural Britain came at a time which betrays just what is on his mind. He spoke in Munich on the day that the fascistic English Defence League ran amok in Luton."
George Galloway, Former MP and radio presenter
"The speech was very balanced. It addressed the problems on the right, of blaming the faith Islam, and also on the left, of denying extremism, and in doing so carved a very welcome middle path."
Maajid Nawaz, Director, Quilliam
"I don't think multiculturalism has failed, I think it has been failed by people not able to address the nuances of British culture. The Prime Minister's speech was much more subtle than will be reported."
Bonnie Greer, Playwright and critic
"Multi-culturalism is a problem where it incentivises segregation or exaggerates differences. But Britain has had a better record on integration than anti-multiculturalist France."
Sunder Katwala, General Secretary, Fabian Society
"It is very hard to see where multiculturalism has succeeded, but multiracialism can and has. Either you should absorb the culture of your host or you practise your beliefs in private."
Ann Widdecombe, Former Conservative MP
"We have to distinguish very carefully between groups that stir up animosity and hatred and those that don't. The 2006 Incitement to Religious Hatred Act has clearly not worked."
Lord Avebury, Liberal Democrat peer
"Multiculturalism is a contradiction in terms because society is defined by its culture. I would hope David emphasises the need to establish common ground between people of different cultures."
Lord Tebbit, Former Tory Party chairman
"The fundamentally radical nature of Islam will come out after more bombs and riots. They'll say that we were right. Until they acknowledge the root of the problem, they can't address it."
Nick Griffin, Chairman, British National Party
"I could support the concept of a 'muscular liberalism' where certain values are actively promoted, but will this be translated into action on, say, faith schools, which arguably impede social cohesion?"
Sarfraz Manzoor, Author
"Mr Cameron's suggestion that we went in for 'casual tolerance' of extremism is absurd – and sits oddly for a man who said we were too tough on counter-terrorism."
Jack Straw MP, Former Justice Secretary
"We are disappointed Mr Cameron omits any reference to the [EDL] spreading hate and bigotry against British."
Farooq Murad, Secretary General, Muslim Council of Britain
"The last government fought hard against extremism both at home and abroad. For David Cameron to suggest anything different is absurd."
Gavin Shuker, Labour MP for Luton South
"No one can disagree that religious groups should observe the laws of the land, but Muslims can't the only target of these discussions. "
Rushnara Ali, Labour MP for Bethnal Green & Bow
"I agree with every fundamental right and freedom in this speech. These are enshrined in the Human Rights Act, which I hope he'll promote, not denigrate."
Shami Chakrabarti, Director, Liberty