Faith schools: Questioned in race riot reports
Home Office minister John Denham said people were "missing the point" when they focused arguments about racial divide on faith schools.
He said many children were effectively segregated, even if they did not go to faith schools.
"There are schools which are predominantly one faith or one culture rather than another," he told ITV's Dimbleby programme on Sunday.
"Every single school is going to need to find ways of addressing the barriers between communities."
Tory former cabinet minister Ann Widdecombe supported Mr Denham, saying faith schools "need not reproduce problems" of segregation.
She said: "The Roman Catholic, Church of England and Jewish communities have been running their own schools with the aid of governments for many decades and the fact is they do not produce a culture or something which is alien to those children functioning in society.
"People go home from those schools to a wider community.
"The problem can arise when you have a community which itself is segregated, with a very distinctive culture.
"You then have a school which then only promotes that, and the children then only go into that segregated community."
Fierce debate
The government policy of encouraging state-funded faith schools has been the subject of fierce debate since it was questioned in last week's reports on the summer's race riots in Oldham, Burnley and Bradford.
The reports warned that increasing the educational divide between youngsters of different faiths was likely to increase the segregation that fuelled the violence.
Ministers defended the policy, with Home Secretary David Blunkett saying that since Christian and Jewish faith-based schools had long been encouraged, other faiths should also have them.
Trade and Industry Secretary Patricia Hewitt - who represents a constituency in multi-ethnic Leicester - said abolishing state-funded faith schools could exacerbate the problem.
Such schools would then move into the private sector, where no children from other backgrounds would be admitted, she warned.
But other Labour MPs, including Halifax MP Alice Mahon, called for the policy to be dropped.