The leader of a Muslim state school is appealing for the right to discriminate in favour of Sunni pupils over Shias after the practice was ruled unlawful.
Dr Mohamed Mukadam, principal of Madani High School in Leicester, is calling for Islamic schools to be able to give preference to separate Muslim denominations as Catholic and Church of England schools can among Christians.
Madani High, the country's first purpose-built state Islamic secondary, was condemned by the schools adjudicator last week for its admissions arrangements after it was found to be giving priority to Sunni pupils.
The school was also criticised for allocating a fixed number of places for boys and girls, which adjudicator Elizabeth Passmore said may break sex discrimination laws.
"It seems to me to be clear that the school was expected to be a Muslim faith school, equally accessible to all Muslims and not giving priority to a particular group of Muslims," Dr Passmore wrote in her judgment.
The expectation that the school would be accessible to all Muslims may have contributed to the strong support it received, she added.
But Dr Mukadam, who is also chairman of the Association of Muslim Schools, criticised the decision. He said the school was holding discussions with the Government to find a resolution that would allow them to continue favouring Sunni pupils.
"With Muslim schools being a new quantity, there are issues that need to be resolved, such as denominations," he said.
"For many years, the Catholics and the Church of England have been providing denominational schools for their followers. If this is allowed for Christians, it should be the same for Muslims."
In common with other Muslim secondaries, Madani High educates girls and boys separately. The pupils have different entrances and there is frosted glass in the boys' classrooms to prevent them from being able to see girls across the school courtyard.
It allocates 60 places a year to boys and an equal number to girls. But Dr Passmore said that the school "must allocate places without regard to the gender of the applicant as it is a mixed school".
Dr Mukadam said: "We have gone to great lengths to ensure equal opportunities for boys and girls.
"We don't want to be operating in an unlawful way, but we can't compromise the tenets of our religion. If we cannot continue in this way, we will have to become two single-sex schools rather than one."
Madani High, which opened in 2007, had also failed to honour its stated intention of making 10 per cent of places available to non-Muslim pupils, Dr Passmore said.
The Government has previously pledged to break down barriers stopping independent minority faith schools from joining the state sector.
But Keith Porteous Wood, director of the National Secular Society, said: "The mounting bitterness of this dispute is just an hors d'oeuvre of what can be expected in future.
"So wedded is the Government to faith schools that even with this development they remain in denial that their mantra that faith schools foster cohesion is dangerous nonsense."