Plans to withhold grants to religious and racial groups were announced by the Prime Minister today as part of a programme to ensure Muslims and other minorities intergrate into British society.

In a speech on multi-culturism Mr Blair said he also wanted to curb discrimination against women in mosques. He emphasised that he did not want to dilute religious identity but said that all British citizens had a duty to integrate.

He set out a series of proposals designed to strike the "right balance" between integration and diversity, some of which are likely to cause controversy among minority groups.

First the Prime Minister said, all future grants to ethnic and religious groups will be assessed against a test of promoting cohesion and intergration.

"In a sense, very good intentions got the better of us. We wanted to be hospitable to new groups. We wanted, rightly, to extend a welcome and did so by offering public money to entrench their cultural presence. Money was too often freely awarded to groups that were tightly bonded around religious, racial or ethnic identities," said Mr Blair.

Speaking in Downing Street, Mr Blair said one of the most common complaints he heard from Muslim women was that they were barred from even entering certain mosques.

He said: "Those (mosques) that exclude the voice of women need to look again at their practices." This would not involve changing the law but the Equal Opportunities Commission had been asked to produce a report by next spring on how it could address the problem of discrimination in mosques.

New British citizens already have to pass a language test but from April the 150,000 to 170,000 people who seek permanent residency in the UK each year will also have to pass an English test before residency is granted.

And visiting preachers would have to have a proper command of English as well as facing the existing test that the Home Secretary can ban them from the UK if their presence is judged not to be in the public good.

In addition, the age at which a person can get permission to come to the UK to marry may be raised from 18.

Mr Blair said the Government would also encourage all faith schools to "construct a bridge to other cultures" by twinning with schools from another faith.

The Prime Minister said: "If you come here lawfully, we welcome you. If you are permitted to stay here permanently, you become an equal member of our community and become one of us. Then you, and all of us, who want to, can worship God in our own way, take pride in our different cultures after our own fashion, respect our distinctive histories according to our own traditions; but do so within a shared space of shared values in which we take no less pride and show no less respect.

"The right to be different. The duty to integrate. That is what being British means. And neither racists nor extremists should be allowed to destroy it."

Mr Blair also re-entered the row over Muslim headscarves - saying it was "plain common sense" that teachers should have to remove them in the classroom.

The controversy was fuelled by the suspension earlier this year of a Muslim teaching assistant who insisted on wearing the niqab.

He said: "I know it is not sensible to conduct this debate as if the only issue is the very hot and sensitive one of the veil.

"For one thing, the extremism we face is usually from men not women. But it...really is a matter of plain common sense that when it is an essential part of someone’s work to communicate directly with people, being able to see their face is important."

Times Recommends

• Postman Pat moved to a high-tech sorting office
• Saatchi’s old favourites - made in China
• New teaching style gives pupils wake-up call