Minorities could be described as, for example “Asian-British” rather than simply as “Asian” under proposals being considered by Hazel Blears, the Home Office Minister.

The plan to adopt the American practice of identifying ethnic heritage will be controversial with some British ethnic minorities likely to claim that it is racist. The idea was condemned as fatuous and retrograde by critics last night.

Ms Blears’s idea, outlined in an interview with The Times, would introduce “double-barrelled” nationality as a way of giving people pride in both their ethnic background and their Britishness.

“In America they do seem to have this idea that you are Italian-American, or Irish-American,” she said. “We don’t do that here.”

It is unclear whether Irish, Scottish or Welsh people would be part of the exercise, which will be put to Muslim leaders in the next few weeks.

Ms Blears, head of a new government commission on how better to integrate minorities, said that she would ask whether they would rather be termed “British-Asian”, or “Indian-British” rather than “Muslim” or “Asian”.

“I am going to talk to people and find out, how does that feel?” she said. “It is about your identity, and I think it’s really important.”

Ms Blears’s proposal is an indication that the Government is taking seriously claims that some second-generation Asians are finding it difficult to identify with either Britain or the country of their roots.

“If you want a society that is really welded together, there are certain things that unite us because we are British,” she said. “But actually, for example, I’m Northern, and you can be a bit different too.”

At the time of the 1991 census many West Indian parents objected to their children being classified by geographical origins outside Britain when they had been born in the country. By 2001, a classification of “Black British” was introduced.

Politicians and Muslim leaders dismissed the proposal last night as a step backwards. Dr Ghayasuddin Siddiqui, head of the Muslim Parliament, gave warning that identifying people by their ethnic background would create racial ghettoes.

He said: “Nobody cares for labels. We have to create a stake-holding society and an inclusive society. Unless you feel you have a stake in the society, you will never be proud of it.

“What’s important is that the form of multiculturalism that we have pursued hasn’t worked, so we have to try to think of new ways. Some young people say to me ‘We have British passports but are treated as Pakis’. Unless we begin to respect each others’ cultures, there may be problems.”

Sir Iqbal Sacranie, general secretary of the Muslim Council of Britain, dismissed the idea as a retrograde step that looked at people in terms of colour. “What of the second generations? Why should they be defined as other than ‘British’?” he asked. “These forms of identity based on ethnic background have been tried in the past and have failed.”

Sir Iqbal pointed out that more than half the Muslim population in Britain is under 35 and that the vast majority were born in the country.

Ms Blears was backed by the Commission for Racial Equality, but it gave warning of pitfalls ahead. A spokesman said: “She’s hit the nail on the head when she says it’s about how people feel and refer to themselves. But one person might be happy being classified as one thing and someone of the same race or religion might not.”

Shahid Malik, a Muslim Labour MP, said that Ms Blears was right in recognising the issue, but felt that she had hit on the wrong solution.

Greg Mulholland, the Liberal Democrat MP for Leeds North West, where the July 7 suicide bombers had their bomb factory, dismissed the idea. “It’s not remotely helpful,” he said. “I think it’s another gimmick. I’m afraid we need some rather more intelligent and far-reaching solutions.”

Edward Garnier, the shadow home affairs spokesman, said: “This is a fatuous idea. We need rather more serious thinking and rather less off the cuff talking from ministers”

“I’ve got a growing number of Asian British people in my constituency. They think of themselves as British. They don’t need a government minister to tell them how to describe themselves.”

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