Ruth Kelly has today pledged £5 million to help counter extremism in Britain's Muslim communities at a local level, though councils and voluntary groups.
The communities secretary said the money would help programmes for excluded young Muslims who may be vulnerable to the "extremist message" and provide training for mosques and madrasas to help them spot the warning signs of extremism.
It could also help expand twinning programmes between schools of different faiths, she said, and provide more volunteering opportunities for young Muslims to help them develop a greater sense of belonging to mainstream society.
"As the events of the last week show, the battle for hearts and minds is more important than ever as is the need for closer working together," Ms Kelly said, referring to last week's counter-terrorism raids in Birmingham.
"We can't win the battle of hearts and minds from Whitehall - it can only be won in local communities. But we can provide more support and strategic leadership."
She admitted the government had relied too much on engaging with specific groups claiming to represent the whole Muslim community, saying the new initiative would "help reach directly into communities" in tackling extremism.
This focus on hand-picked organisations has been a main criticism of the government's approach to tackling extremism, and yesterday Tony Blair admitted ministers must engage with Muslims "in a different way" and take a more "head-on" approach.
However, the prime minister defended the emphasis on dealing with problems of community cohesion among Muslims specifically, rather than other British communities, saying the current terrorist threat was intricately linked with Islam.
"I think the majority of Muslim people in this country are not extremist at all," he told senior MPs on the House of Commons liaison committee.
He said: "I think it is actually very important that we recognise that it is not the Muslim community that is refusing to integrate, it is a small section, and actually they do not represent either the true spirit of Islam or the true spirit of the Muslim community here."
But he added: "This particular extremism (which is worldwide) has grown up based on a perversion of the faith of Islam.
"They are not Hindus, they are not Sikhs, they are people who profess the faith of Islam, although they are acting wholly contrary to its proper spirit."