New rules for academies and free schools that compel them to promote British values are "dangerous" and could effectively stop Muslims becoming trustees or governors, it is claimed.
Education Secretary Michael Gove has drawn up funding agreements that will allow him to shut down schools or kick out governors if he believes a member of the academy trust is "unsuitable" because of "relevant conduct".
Unacceptable actions are defined as anything "aimed at undermining the fundamental British values of democracy, the rule of law, individual liberty and mutual respect and tolerance of those with different faiths and beliefs".
The Muslim Council of Britain (MCB) has raised fears that the reforms, which will apply to new academies and free schools, could prevent people with conservative Muslim beliefs viewed as incompatible with "British values" being involved - a claim the Department for Education denies.
Talha Ahmad, a senior member of the MCB, told the Guardian: "As a matter of principle, to have so much power vested in one hand is wrong. But then to have powers over an area over which there is no consensus is, frankly speaking, quite dangerous.
"People may have different views, and those views might be informed by faith. But does that mean the secretary of state should have the power to arbitrate these ideas, so much so that they should not be part of an educational establishment?
"This whole idea of giving the secretary of state the power to decide which views fall foul of British values, on matters such as school governors, seems to be draconian."
In the wake of the Trojan Horse controversy over Islamist influence on some Birmingham schools teachers were told by Mr Gove that they must "actively promote British values".
The DfE funding agreement sets out how schools must promote respect for the law, democracy, equality and tolerance of different faiths and religious and other beliefs.
A DfE spokeswoman said: "There is absolutely no bar to Muslims becoming school governors. We want a diverse range of people, of all faiths and none, to serve on governing bodies.
"It is right that we prevent unsuitable people from becoming governors. We are clear that any behaviour which undermines the fundamental British values of democracy, the rule of law, individual liberty, mutual respect and tolerance of those with different faiths and beliefs is incompatible with being a governor in a state-funded school in England."