Race hate crime cases rose by almost a third in England and Wales in 2004-05, latest figures from the Crown Prosecution Service (CPS) have shown.
Two-thirds of victims in religiously aggravated crimes were Muslim
The CPS prosecuted 4,660 defendants for racially aggravated offences, up by 29% from 3,616 for the previous year.
The CPS said better co-ordination with police and lawyers had increased the confidence of victims to prosecute.
A separate EU report praised the UK's response to London's bombings, saying it limited a backlash against Muslims.
The Muslim Council of Britain said the figures were "troubling" especially as they were for the period before 7 July.
The latest figures are for the year to March.
CPS director of equality Seamus Taylor acknowledged there had been a "trend increase" in racist crime in recent years.
"But there's also a range of other significant factors," he told BBC News.
"We increasingly take responsibility for the charge that's decided in these cases, working closely with the police in police stations.
"There's increased awareness of these crimes in communities and our policy is increasingly getting out to communities that we want to firmly and fairly and robustly prosecute such cases," he said.
Religiously aggravated cases dropped to 34 from 49 the previous year, with 23 of the victims' actual or perceived religion being Muslim.
It was Christian in four, Hindu in two and Mormon in one. In four cases the religion was unknown.
Sir Iqbal Sacranie, secretary general of the Muslim Council of Britain (MCB) said the CPS figures were "obviously very troubling".
RACE HATE CRIME - 2004-2005
8% fewer charges than last year were dropped because of insufficient evidence
Conviction rate for all race offences charged dropped 2% to 84%
81% of all cases handed to the CPS went to court
Since race was made an aggravating factor, cases have doubled from 2,417 in 1999-2000
"What adds to our concern is that they refer to race hate incidents prior to the July 7 atrocities after which we saw a large number of 'revenge' attacks against Muslims.
"We would urge people from all communities to report these kinds of racist attacks to the police immediately.
"There must be no toleration at all of race hate or faith hate crimes."
In a separate report into the aftermath of the London bomb attacks, an EU body praised the united response of British authorities and communities, saying this had limited a potential backlash against ordinary Muslims.
Analysing figures for hate crimes around 7 July, the day of the London suicide bombings, the European Monitoring Centre on Racism found an increase in incidents immediately before and after the attacks - before the rate quickly fell back again to recent levels.
The CPS found that despite efforts to boost confidence in the system, an additional 5% of charges were dropped because there was no witness testimony.
In those cases the witnesses refused to give evidence or failed to turn up to court.
Of 6,200 charges brought, 2,506 were dropped.
Of those, 480 were because the witness failed to show up and 293 because they would not co-operate.
The Commission for Racial Equality said the figures suggested a "difficult social problem that continues to blight the lives of many of Britain's ethnic minorities".
It said the increase was due in part to the success of the police and CRE working together, but a spokesman added: "We are concerned that more people are refusing to give evidence.
"Until all victims and witnesses of these crimes have full confidence that the justice system will deal with them, we will never know the true extent of the problem."
The number of racist incidents passed to prosecutors by the police was up 22% to 5,788.
Assaults, criminal damage or public order offences made up most of the charges but there were also four murders.