The number of state-funded Muslim schools will more than double, despite David Blunkett, the former education secretary, voicing doubts over the expansion of faith-based education.
A report to the Department for Education and Skills, obtained by The TES, identifies seven private Muslim schools which should be fast-tracked into the state sector.
The recommendations come 12 months after Tony Blair indicated that fee-charging Islamic schools should be brought under state control to help integrate Muslim communities after the July 7 suicide bombings in London.
The shortlist, which will increase the number of maintained Muslim schools from five to 12, includes one in Dewsbury, West Yorkshire, the home town of Mohammed Sidique Khan, ringleader of the July 7 attackers.
But Mr Blunkett, who was education secretary from 1997 to 2001, and is seen as the architect of the Labour government's existing policy to expand faith schools, last week admitted he had major doubts over the move.
He said he "did not feel comfortable" with his original 1998 decision to award state funding to new Muslim faith schools, and admitted the policy was driven entirely by "pragmatism".
Addressing an audience at the Institute of Contemporary Arts, London, he said the Government at the time was "faced, particularly in places like West Yorkshire, with youngsters going 15-20 miles to quite unacceptable education, which was anything but open and liberal". He said such schools were encouraged to enter the state system to ensure they adhered to the national curriculum and "there was a common understanding of what was going to go on there".
Mr Blunkett added: "It was not one of my finest philosophical arguments - I didn't feel wholly comfortable with it - but I didn't feel comfortable with the idea of saying, 'We already have Catholic, Anglican and some Jewish schools in the system, I'm afraid we can't have yours'."
The admission will raise fresh doubts over government moves to increase the number of faith schools. Since Labour came to power, nine out of 10 applications by religious groups to open new faith schools have been supported. It is believed more will be created under the education Bill, now being debated in the House of Lords, which gives faith groups and private organisations greater power to run state schools.
This week peers from the three main political parties, including Labour's Baroness Massey, the Conservatives' Baroness Flather, and the Liberal Democrat Baroness Tongue, proposed an amendment to the Bill calling for a "bar on the establishment of new schools of a religious character".
But ministers insist the drive to expand faith education is being driven by parental demand.
Lord Adonis, schools minister, said in the Lords debate: "It would unacceptably infringe the rights of parents in local communities to have a ban on the establishment of new faith schools."
The Association of Muslim Schools, which was commissioned by the DfES to identify possible Muslim converts to the state education system, says as many as half the country's 120 private Islamic schools may eventually join the maintained sector.
The Government, which will have the final say on whether the seven are approved, after consultation with local authorities, said schools being fast-tracked under the scheme would be given more time to bring their buildings up to standard.
Idrish Patel, head of Bolton Muslim girls' school, one of the seven shortlisted, said: "We have to prepare students for the sort of society where you are expected to mix with people from all sorts of traditions."
NEWS 6, leader 16