The real sleepwalkers

Ultimately, Phillips lost the argument. In spite of his comments, two thirds of Britons thought that, "multiculturalism enriched our lives". In terms of the nation, "sleepwalking into segregation", the report's author, Dr Mike Poulson, was incandescent that Phillips had turned his positive analysis and conclusion upside down to propagate his spurious position.

Now, in what can only be described as an extraordinary move, the prime minister himself has weighed into the debate. Undermining Phillips, he sides with public opinion that multiculturalism should be applauded and celebrated, while persisting in the erroneous theme that non-integration by Muslims equals extremism.

In his first major speech about race, religion, extremism and British identity, the prime minister made a number of powerful assertions that were not only contradictory, and confusing, but shockingly also ignored the root causes of his central theme: the radicalisation of British Muslims. In doing so, his proposals for a more integrated nation are fundamentally flawed. Furthermore, these measures would only serve to hobble the genuine efforts of many of his ministerial departments and others to tackle race and religious inequalities.

He began his speech by highlighting why he thought Britain had won the Olympics: "When we won the Olympic bid to host the 2012 Games, we presented a compelling, modern vision of Britain: a country at ease with the different races, religions and cultures."

Acknowledging the cultural, social and economical contribution migrants from all faiths and races have made, he stated that, "Britain has greatly benefited by migration." Quoting Phillips, he even suggests that, for non-whites, this is perhaps the best place to live in Europe.

This world-beating integrated society he presents seems at odds with his dramatic proposal to stop public funding of groups that cannot demonstrate they are furthering racial and religious integration. It is clear, though, from his speech that the justification for this policy shift is the radicalisation of British Muslims particularly after the 7/7 British-born suicide bombers.

The lack of integration, he suggest, has been caused by the nation's over-generosity to provide "voluntary organisations' public money to entrench their cultural presence"; concluding, he argues, "Money was too often freely awarded to groups that were tightly bonded around religious, racial or ethnic identities."

Let's be clear about this: the confusion, contradiction and fundamental undermining about what is best in multicultural Britain, is being caused in no small measure because the prime minister is buried in denial about the root causes of the radicalisation of British Muslims.

When we consider the war in Iraq has politicised a generation of young people as never before, the overwhelming majority of whom were driven not by any personal involvement but rather by their desire to confront an unjust war. What effect, therefore, would it have on impressionable young Muslims who would feel not only the same common sense of injustice but also that their religious brothers and sisters were under attack from 21st-century imperialism ?

The thinktank Demos recently came to a similar conclusion, stating: "The grievances that are felt in some parts of the Muslim community about foreign policy, and especially about Iraq, are pretty cogent and pretty convincing."

As Tariq Ramadan and many others have argued, this acknowledgement in no way condones the barbarity of the 7/7 bombers, but it does help us to understand more acutely how fanaticism can be fuelled by injustice.

What is, in fact, extraordinary about the prime minister's position is that, on the world stage, he, too, clearly understands the concept of cause and effect. In a powerful speech to world leaders at the Los Angeles world council conference back in August, he told delegates that the arc of extremism which had touched many countries would not be defeated unless "we reappraise our strategy, unless we revitalise the broader global agenda on poverty, climate change, trade, and in respect of the Middle East, bend every sinew of our will to making peace between Israel and Palestine."

Given the sharp contrast between what Blair states here and what he describes at home, he's forced to engage in a political sleight of hand that, there, acknowledges the role of western foreign policy in fuelling Muslim extremism but, here, attributes the drivers of extremism to domestic policy that fosters Muslims' exclusion.

The most disingenuous part of Blair's position is that the UK's domestic vision, its legislative programme and now-defunct enforcement body', the Commission for Racial Equality, have ensured - by his own boast - that we became multicultural world beaters. Individuals such as Roy Jenkins, whom he mentions in his speech, popularised the term "multiculturalism". For him, it celebrated diversity, while striving for equality of opportunity. This is what a nation understood and overwhelmingly believed had enriched our lives.

Blair's attempt to take the focus away from tackling racial and religious inequality, fundamental to the spirit of multiculturalism, will not only undo all that has been achieved but will cause precisely what he seeks to avoid: segregated communities.

Given the close ties between the prime minister, Ruth Kelly and Trevor Phillips, they will all be aware, that when it comes to social integration (according to a CRE report), African, Asians, Caribbeans, Muslims, Hindus and Sikhs have more white indigenous friends than vice versa. If logic, therefore, led this debate, the question about greater integration and voluntary-sector funding would not be placed at the door of race and religious groups but rather to wider society.

Jenkins and others clearly understood that a well-balanced, integrated society stems from all communities being afforded basic equality of opportunity. Over the last 30 years, we have made progress, but - contrary to Blair´s assertion that disadvantage "usually has nothing to do with ethnicity" - every ministerial department would concede there is still a long way to go before racial and religious equality is achieved. We need look no further than this week's report that outlines a scandalous level of institutional racism within the educational system.

It is critical, therefore, that the social consciousness of the nation that protested against the war now confronts the last days of the Blair regime that is unwilling or unable to confront its foreign-policy demons. If left unchecked, they will set us on a path of racial and religious disarray that could take a generation to put right.