Protesters barracked the Home Secretary, John Reid, as he gave a speech urging Muslim parents to watch their children for signs of extremism.
Yesterday's speech, to 30 Muslims in Leyton, east London, was the first Mr Reid had delivered to a Muslim audience since he took over as Home Secretary in May.
One protester, the Muslim activist Abu Izzadeen, accused the police of state terrorism and called Mr Reid an "enemy of Islam and Muslims." He was escorted away by stewards and police.
Mr Reid was listing past terrorist attacks around the world when Mr Izzadeen began shouting, asking Mr Reid how he could "dare" come to a Muslim area after so many had been arrested under the new terror legislation. "Shame on all of us for sitting down and listening to him," he said.
Referring to the increased police powers, he added: "They are going to come in the morning to your house... they are going to kick your door down when you're in bed with your wife, then drag you from your own bed."
It later transpired that Mr Izzadeen has been investigated over controversial comments about the London suicide bombings, after describing the attacks as "mujahideen activity" which would make people " wake up and smell the coffee", during a BBC Newsnight interview last year.
Another protester who heckled Mr Reid was also escorted out, brandishing a poster which read "John Reid you will pay."
Mr Reid had been speaking about how the community and religious leaders could play a key role in the fight against terrorism. He said that "our fight is not with Muslims generally" but that there was a " struggle against extremism".
"There is no nice way of saying this. These fanatics are looking to groom and brainwash children, including your children, for suicide bombings, grooming them to kill themselves in order to murder others," he said.
The speech came after some Muslim leaders expressed concerns over Britain's foreign policy and called for it to be changed.
Massoud Shadjareh, chairman of the Islamic Human Rights Commission, said Mr Reid's demands were "unrealistic and not demanded from any other community". He said his words reflected the Government's "absolute refusal to recognise that its policies have had a substantial role to play in the quagmire (in which) we now find ourselves".
Ahmed Versi, the editor of the London-based publication, Muslim News, said Mr Reid's advice to Muslims had been tantamount for a call to parents to "spy" on their children. It suggested all Muslims were potential terrorists, he said. "What is he asking Muslim parents to spy on? It is a pure farce", he said.
Fatima Yakub, 32, confronted Mr Reid, saying: "What I am really worried about is the Muslims pinpointed after 7 July and the Muslims incarcerated in Belmarsh without trial," she said. Mr Reid replied that she was entitled to her view and that was why he valued Britain's tradition of freedom of speech.
A spokesman for the Islamist political organisation Hizb ut-Tahrir Britain, Imran Waheed, said that he felt Mr Reid was making a "ridiculous demand".
"These comments can only be seen as further evidence of the Government shifting the blame from itself... The Muslim community will reject his 'advice' to spy on each other and his attempt to promote fear and hysteria in the wider society," he said.