One in 10 Muslim students would not report potential terrorists planning to attack Britain, according to a survey by college Islamic societies.
The Federation of Student Islamic Societies questioned more than 450 students in further and higher education in the UK following the attacks on London in July this year.
While 85 per cent condemned the suicide bombings, one in 10 said they would not tell the police if they knew of a similar plot.
Most did not say why they would withhold information, but the rest said either that they mistrusted the police or that they would not break their loyalty to a fellow Muslim.
While the federation said that it was a religious duty for Muslims to help prevent such attacks, it added that the police must do more to earn their trust, especially since the shooting of Jean Charles de Menezes at Stockwell station, who was mistaken for a suicide bomber.
Bill Rammell, the higher and further education minister, attended the launch of the report.
He said: "I find it alarming that some students would not report a planned attack. I welcome the fact that the federation said it concerned them as well.
"It reinforced the need for all of us to take a lead in addressing that situation and making clear how unacceptable it is.
"I don't think we can legislate to force people to inform. But we can take a lead in saying that anyone who does have information has a responsibility to pass it on."
The survey revealed that nearly half of students said they had experienced Islamophobia, with many of the incidents occurring on campus.
Many Muslims had also become deeply alienated. More than a quarter of students said there was a conflict between their loyalty to the UK and to the Ummah, the global Muslim community.
"You can't have loyalty to the UK and the Ummah, it's one or the other...
"The UK wants to kill our brothers and sisters and we can't condone this.
So there is a clash," one female student, quoted in the report, said.
But another disagreed: "There has always been tolerance towards Islam and this makes me respect the British more and increases my loyalty to the UK."
British foreign policy was the most commonly cited reason for the London attacks, with 62 per cent saying it played a "major" or "complete" part.
Mr Rammell denied that the Government's strategy of engaging with Muslim youth would be undermined by their anger at foreign policy.
"Whatever concerns anybody has about British foreign policy, nothing, but nothing, justifies killing innocent people," he said.
"Part of what we are doing is to convince people that if they disagree, there are ways and means of expressing that within the democratic system."
Mr Rammell said the UK had defended Kosovo against Slobodan Milosevic and added that Saddam Hussein had probably killed more Muslims than any other leader.
There is no specific research on extremism in FE campuses, but Mr Rammell said he believed it was rare and likely to involve only a few individuals rather than organised groups.
But religious extremism has fuelled clashes in colleges in the past. In 1995, a Nigerian student was murdered after a confrontation with Islamic fundamentalist students at Newham college.
Omar Bakri Muhammad - the Syrian-born cleric who has now been banned from returning to this country because of his support for terror attacks - spoke to students four days before the murder.