British Muslims are at risk of being radicalised because of the strident language used about countering Islamist terrorism, the authors of a landmark report on religion in the UK have warned.
Retired senior judge Baroness Butler-Sloss said the way the Government and the media portrayed the issue could leave some feeling "that they are not part of British society".
In a wide-ranging report on the place of different religions in British society, they also raised concerns about the role of sharia courts and called on the Ministry of Justice to issue guidance for all religious courts and tribunals to ensure they comply with gender equality legislation.
The Commission on Religion and Belief in Public Life (Corab) also recommended that major national and civil events, including coronation ceremonies, should have a more "pluralist character" to reflect a shift in religious beliefs in British society.
Among other recommendations were that faith schools should reduce selection of pupils and staff on grounds of religion, the legal requirement for schools to hold acts of collective worship should be scrapped, and a reduction in the number of Church of England bishops in the House of Lords from 26 to 16, with a greater representation of other religions.
The commission, chaired by Lady Butler-Sloss, said: "In framing counter-terrorism legislation, the Government should seek to promote, not limit, freedom of enquiry, speech and expression, and should engage with a wide range of affected groups, including those with which it disagrees, and also with academic research.
"It should lead public opinion by challenging negative stereotyping and by speaking out in support of groups that may otherwise feel vulnerable and excluded."
At the report's launch Lady Butler-Sloss said: "There's a real danger with the rhetoric that it is turning certain groups, particularly the Muslims, into feeling 'other', feeling that they are not trusted, feeling that they are not part of British society.
"That's very sad for the vast majority of very decent Muslims who live in this country. They should feel that they belong, not that they don't belong. But it also has real danger of radicalisation."
She said the Government and councils should be prepared to talk to "ultra-conservative" groups which did not support violent extremism.
"We are bombing Syria as well as Iraq. But we are not going to win the hearts and minds of people other than through the actual communities from which these people come," she said.
That would mean "partnership with those groups who may, at the moment, be looked at with suspicion because they are perhaps ultra-conservative and therefore are way out from the point of view perhaps of government".
Criticising the debate around counter-terrorist legislation, she said: "It's not only government. I personally think it's not so much government but it's the interpretation of what the government is doing by the media, in particular, but also by people.
"I have a friend in the West Country who has never met a Muslim and she says, 'I hate all Muslims', because she reads about them in the popular press, that Muslims are doing this and that, and she assumes all Muslims are the same."
She said it was "tragic" and added she would take a Muslim friend down to the West Country "to see that my friends are as normal as she is - rather more normal".
Turning to the increased use of religious tribunals such as sharia councils, Lady Butler-Sloss stressed that they had to comply with "British standards of gender equality".
She said: "Nobody really knows what's going on in some of the sharia councils."
Lady Butler-Sloss added that although bishops played a leading role in the House of Lords, she would like to see more religious diversity.
The former leader of England and Wales's Catholics, Cardinal Cormac Murphy-O'Connor, would be an ideal choice, she said, but suggested that Rome was stopping him.
"I would like to see Cardinal Cormac Murphy O'Connor as a member of the House of Lords. Indeed I said that to him on one occasion and he said he would like to do it, but I assume that he is not being allowed to - I don't know - presumably by the Vatican."
Despite the report's recommendations on reducing the role of the Church of England in public life, Lady Butler-Sloss insisted the commission "does not mean the overturning of the Christianity of this country".
The BBC's flagship religious slot Thought For The Day on Radio 4's Today programme should be opened up to people who do not speak from a faith viewpoint, the report suggested.
Commission member Lord Harries, the former Bishop of Oxford and a Thought For The Day contributor, said: "It is meant to be a way of illuminating something in the news at the moment from a standpoint of a particular faith. Therefore I think the view of the commission is that should be equally possible from people standing for ethical traditions which are non-religious."
Another commission member and Thought For The Day speaker, Ed Kessler, added: "One would have thought that Thought For The Day could be delivered by anybody who is thoughtful."