Every few months, teachers at the Muslim Al Furqan primary school in Birmingham organise a clothing “swap-shop” to help families unable to afford the basics for their children.

Headteacher Zahida Hussain said that some Muslim families in the run-down Sparkhill area also had to skimp on groceries in order to send their children to the fee-paying religious school.

Other parents tell of living in one room to cut heating bills.

However, the community has remained undeterred. At the last count Al Furqan had a waiting-list of 500 names, and not all were from Muslim families.

The pound;1,050 yearly fees will soon disappear, however. In September, Al Furqan will become one of two Muslim schools to receive state funding and “opt in” to the grant-maintained sector.

For Al Furqan school, it will end almost four years of uncertainty - for Britain’s Muslim community it signals an end to Government intransigence and the dawn of equality of opportunity for its children.

“Parents first voted for us to apply for GM status in September 1994, but it was not until January 1997 that we submitted the formal bid. That is how long it took until we were sure we were satisfying all the criteria laid down by the Government,” said Ms Hussain.

“We were disappointed that the Tory government did not approve everything before it left office, as it was promoting this policy so intensely. But we are delighted that Labour is allowing us to proceed without having to wait for new legislation.”

Al Furqan was created in 1989 out of a Muslim study group. The centre offered education for women and also took in the daughters of those who felt the mainstream education system could not cater for their needs. In 1992, boys were admitted for the first time.

Ms Hussain was the founder, and the first woman in the country to set up an Islamic school.

“It was seen as something a Muslim female should not be doing, but this attitude prevailed less within the community than outside it,” she said.

Today, the school has 110 pupils aged four to 11, though numbers will almost double when Al Furqan moves on to the pound;1.5 million site of a former hospital later in the year.

Ms Hussain said that the country’s 60 Muslim schools had been discriminated against for too long, and she believes more of them will now seek state funding.

“The Muslim community has generally felt it did not have a choice. Now we have equality the same as other church schools. There has been a lot of excitement over this announcement and the feeling is that the discrimination has now ended,” she said.