Muslim leaders yesterday challenged Tony Blair's antiterror plans as they revealed fears that Islamic values could be "demonised".
Among the proposals they criticised was the closure of mosques defined as extremist, which they warned could "fuel a radical sub-culture".
A 38-strong list of signatories, including the Islamic Human Rights Commission and the Muslim Association of Britain, also condemned plans to ban pressure group Hizb ut-Tahrir.
The various leaders issued a six- point statement in response to the Government's measures in the aftermath of the London bombings.
It said: "We fear that recent events are being exploited by some sections in society to demonise legitimate Islamic values and beliefs and hence consider it appropriate to make the following observations."
The statement criticised the use of the term extremism, which it said had no tangible legal meaning and was unhelpful.
The right of people to resist invasion and occupation was legitimate, it argued.
Questioning the legitimacy of Israeli occupation was also valid political expression, the signatories added.
A proposal to ban Hizb ut-Tahrir was "unwarranted, unjust and unwise" and any disagreement with a political organisation should be expressed through debate, not censorship.
The statement from the group, including Hizb ut-Tahrir Britain, read: "If it is suggested that any laws have been broken by any individuals or groups then this must be proven by due legal process.
"Criminalising the mere possession of certain opinions is the hallmark of dictatorships, not democracies." Closure of mosques accused of "fomenting extremism" would amount to a collective punishment of the community and may create fear which could lead to a "very radical sub-culture".
Finally, the Muslim leaders said plans to deport foreign nationals to countries known for human rights abuses was "abhorrent".
Earlier this month Mr Blair vowed to throw out fanatical preachers as he announced wide-ranging powers to combat Muslim extremists.
He warned: "The rules of the games are changing."
Mr Blair said that clerics coming in to preach at British mosques will have to be vetted to ensure they do not pose a threat while those already here who do will be deported.
On issuing yesterday's statement, Massoud Shadjareh, chairman of the Islamic Human Rights Commission, said: "The British Muslim community has always been a law-abiding community, however, we will not allow the demonising, devaluing or targeting of the concept of Islam."
The statement said that Government proposals could "stifle discussion" on issues such as resistance to the coalition's presence in Iraq.
"We are concerned that these proposed measures are intended to prevent the popular opposition witnessed in the run-up to the Iraq war should the United States wish to attack Iran, Syria or any other sovereign nation in the near future."
But Shahid Malik, Labour MP for Dewsbury, said it was an "absolute nonsense" to suggest that the policies were intended to crack down on criticism of its Iraq policy or came as a prelude to attacks on Syria and Iran.
"This is the cynical ranting of people desperate to get mainstream Islam on their side. These people are testament to a denial and blanket rejectionist culture," he said.