Tony Blair's flagship education reforms could increase racial segregation and destabilise communities, the Commission for Racial Equality (CRE) has warned.
The CRE fears racially mixed schools could disappear
Evidence suggests that - given unlimited choice - parents would band together along racial lines, CRE policy chief Nick Johnson told MPs.
Such segregation was bad for society as it bred political and religious extremism, he argued.
An education department spokesman said the reforms will reduce segregation.
Mr Johnson spoke out as he gave evidence to the cross party Education and Skills committee, which is investigating citizenship education in the UK.
He said the answer to segregation fears was to force schools to be more diverse in their admissions.
The government says its education bill will promote diversity, choice and high standards for all pupils.
But Mr Johnson told the MPs that people in the UK were increasingly leading "parallel lives," both "residentially and socially".
"They don't get a chance to interact with different people socially and if that is happening in schools then that sets people up to be segregated for life," he told the committee.
He said the problem was not so much the government's backing for faith schools, which often recruited from diverse socio-economic and ethnic groups, but its promotion of Trust Schools.
Such schools will be given more freedom over budgets and admissions and are a key plank of the government's education bill which last month completed its stormy passage through parliament.
But Mr Johnson said the CRE was concerned Trust Schools could threaten community cohesion, without proper safeguards in place.
"There is evidence that, to some degree, parental choice can increase segregation because there is an instinct to be with people like yourself and that parents tend to make that choice.
"So I think there is a concern about just allowing pure parental choice."
He said he "welcomed" proposals to force Trust Schools to promote "community cohesion" but added every school should have a duty to make sure its intake was "varied".
The CRE was also concerned about the government's flagship City academies and specialist schools, which are allowed to select pupils by aptitude in certain subjects.
"There is emerging evidence from academies and we are about to look at that in more detail where you have choice either for parents solely or choice by the school that you can get more segregated or more homogenous schools.
He welcomed "greater range of options" contained in the government's education bill, but said safeguards, such as twinning of schools and school federations, must be in place.
Mr Johnson told the committee areas where the BNP did well at the ballot box tended to be the most racially segregated.
"Our fear is that extremism is far more likely to develop in areas that are segregated," he said.
The reason for this, he argued, is that "it is far easier to spread myths and misinformation and drum people up against each other if you are not encountering other people, because you are more likely to believe those myths."
He acknowledged the CRE had become increasingly critical, under chairman Trevor Phillips, of the brand of multiculturalism practised by some local authorities, which emphasised "the differences between communities rather than what united communities".
And he said this had prompted "a need to look at focusing on what can unite people, and that's starting in the classroom but through all walks of life".
He also told the committee there needed to be a "stronger" British identity.
But a spokesman for the Department for Education argued that no school was allowed to admit students by reference to ethnicity, and to do so would breach Race Discrimination legislation.
"Many faith schools are ethnically diverse. For example, Catholic schools are more diverse than non-faith schools," he said.
"We have always been clear that our reforms will reduce segregation - there is nothing in our Education Bill that will increase it.
"On the contrary we have placed a specific duty on Trusts to promote community cohesion.
"In addition, fair play in admissions and a schools commissioner will ensure that schools are accessible for people from all backgrounds and have an ethos that promotes understanding of different cultures, races and religions."