An Islamic state secondary school has been found to be giving preference to children from a private school in its admissions process.
The schools adjudicator upheld a complaint against Madani High School in Leicester.
The adjudicator found the admissions process was "socially and economically discriminatory", reducing the places for Muslims from other local schools.
Madani High School became part of the state system last year.
Following the ruling by England's schools adjudicator, Peter Matthews, the school will have to change its policy in deciding who should be awarded places when there are too many applicants.
'Guaranteeing a place'
The complaint, brought by the city council, was that the school's over-subscription criteria included giving priority to pupils from the independent Leicester Islamic Academy Primary School.
The Madani High School had been part of the Leicester Islamic Academy until it transferred to the state system in 2007 - with the new school replacing the secondary section of the Leicester Islamic Academy.
Secondary schools are allowed to designate feeder primary schools under the admissions code, but with the requirement that this must "not disadvantage children from more deprived areas".
In naming only one feeder school which was fee-paying, the adjudicator decided that this disadvantaged such deprived children.
Dr Matthews said that giving priority to this independent school was in effect "guaranteeing a place to Muslim children whose parents can afford the fees, who thus have priority over Muslim children at large".
In upholding the complaint, Dr Matthews acknowledged the school's submission that the fees for the independent school were "minimal" and that more than that half of the intake next year would be from other schools.
The importance of a fair over-subscription code was emphasised by Dr Matthews, when the school had been created to alleviate the "high and unsatisfied demand for education in an Islamic school".
In response, the school had told the adjudicator that fees at the independent primary school were "minimal" and that many of those families attending this school were themselves poor and had made financial sacrifices for a good education.
The school also told the adjudicator that the anticipated intake of the school would mean that more than half of the pupils would come from schools other than the Leicester Islamic Academy Primary School.
The school's mission statement says that it wants to help "learners to become confident in their identity as British Muslims".
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