Almost £1 million of public money is being given to a think-tank run by two former Islamic extremists, despite reservations being expressed by members of the Government and the Opposition.

The funding is for the Quilliam Foundation — a counter-extremism think-tank set up nine months ago by Ed Husain, a bestselling author, and Maajid Nawaz, a former political prisoner in Egypt — as part of the Government’s strategy to combat the radicalisation of British Muslims.

The scale of the funding has aroused concerns that the Government is relying too heavily on a relatively unknown organisation in its desperation to counter extremism.

The Times understands that the foundation, which has 18 full-time staff, is paying about £110,000 a year to rent offices at one of Central London’s most prestigious addresses, which, for security reasons, have no name plate or sign outside. Inside, the offices are expensively furnished with state-of-the-art computers and plasma screen televisions.

Mr Husain and Mr Nawaz, the organisation’s directors, are believed to be receiving salaries of about £85,000 each a year. The foundation refused to discuss individual earnings.

Doubts have been expressed by Labour and Conservative MPs as to whether the investment will produce results.

Patrick Mercer, the Tory MP who heads the House of Commons counter-terrorism sub-committee, said: “It will be very interesting to see what has been achieved with this considerable sum of public money.”

One government minister said that the size of the grant was outrageous, adding that Britain had become home to an “ex-Islamist industry”.

A senior Conservative adviser familiar with the foundation’s work said: “The question here is, how are they going to use the money they’ve been given and how effective will their proposed projects be in delivering value for money?”

In this financial year, the foundation has received £660,000 from the Home Office and £140,000 from the Foreign Office. The Home Office has earmarked an additional £100,000 for 2009-10.

Sources close to the foundation said that it was expecting another £660,000 from the Foreign Office over this and next year. A Foreign Office spokesman said that any future payments depended on the foundation making “satisfactory progress”.

Mr Husain, 34, and Mr Nawaz, 31, have come a long way since their days as members of the radical Islamic political group Hizb ut-Tahrir.

The duo travel the world to lecture on the threat of Islamist ideology. Mr Husain’s autobiography The Islamist has sold 87,000 copies, although he insisted that he received only 12p per copy sold on top of his £4,000 advance. He is working on a second book.

Mr Husain said that Islamism was an ideology that could be defeated only by those who were once a part of it. “If it is becoming an industry, it’s a good one and let’s have more people on it,” he said.

Mr Nawaz refused to say how much rent the think-tank paid, but said it was “cheaper than Westminster”.

The Quilliam Foundation says that it is working to tackle the extreme Islamist ideology coming out of mosques, universities and madrassas in countries such as Syria and Pakistan. It also advises police and security agencies on counter-extremism methods and is to release its findings next month on an inquiry into British mosques, followed by the publication of an investigation into Islamic radicalisation in prisons.

The foundation found itself in the spotlight after Mr Husain expressed scathing views on Israeli foreign policy as a result of the Gaza crisis. Some Muslim critics suspect that the Quilliam Foundation’s highly publicised call for Gordon Brown to demand an immediate ceasefire was an attempt to win credibility with British Muslims, some of whom have accused Mr Husain and his organisation of being pro-Zionist.

Inayat Bunglawala, of the Muslim Council of Britain, dismissed the Quilliam Foundation as a government stooge. “It has very little credibility amongst British Muslims . . . They have fashionably styled themselves as being the UK’s first anti-extremism think-tank,” he said. “Their recent criticism of the Government concerning Israel’s criminal actions in Gaza will not fool many people and is transparently designed to win support from a very sceptical Muslim community.”

However, the critical government minister said that the foundation was receiving so much public money because it was perceived to be toeing the government line. “Ed and Quilliam have very little support in the mainstream Muslim community,” the minister said. “They have much more enemies than friends. But he’s loved by some ministers, which is why his organisation is having so much money thrown at it. And the Government knows that if you want a Muslim to say pro-government things, then Quilliam is the answer.”

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