David Bell, head of the Office for Standards in Education, warned on Monday that the traditional Islamic education offered by some schools "does not entirely fit" children for living in a diverse society.
Bell, making a speech in London, raised concerns about religious-based schools in general, but singled out the rapidly growing number of Islamic schools, calling on them to promote "tolerance and harmony".
"We must not allow our recognition of diversity to become apathy in the face of any challenge to our coherence as a nation," he said.
"I worry that many young people are being educated in faith-based schools, with little appreciation of their wider responsibilities and obligations to British society."
He said Muslim schools in particular must reform their lessons to give children "an appreciation of and respect for other cultures in a way that promotes tolerance and harmony".
There are more than 100 Muslim schools in England, five of which are state run, with the rest independent. There are also more than 50 Jewish schools and about 100 Evangelical Christian schools.
Scotland, Wales and Northern Ireland are dealt with separately in terms of education.
Bell's comments were met with protests by Islamic groups.
Iqbal Sacranie, secretary-general of the Muslim Council of Britain, said that while national cohesion was important, it was "highly irresponsible to suggest that the growth of Muslim faith schools poses a threat to 'our coherence as a nation'".
Muhammad Mukadam, chairman of the Association of Muslim Schools, who is principal of Leicester Islamic Academy in central England, slammed Bell's comments as "Islamophobia".
"For a person in his position to make such a generalised comment just beggars belief," he said.
According to Britain's last national census in 2001, just under 1.6 million people identified themselves as Muslim in Britain - mainly originating from South Asian countries such as Pakistan and Bangladesh.