Ministers have restored official ties with the Muslim Council of Britain despite its refusal to remove a deputy leader accused of supporting attacks on British soldiers.
Hazel Blears severed Government relations with the country's leading Muslim group almost a year ago after deputy secretary-general Daud Abdullah signed a declaration in support of Hamas.
The document also seemingly advocated attacks on the Navy if it tried to stop arms intended for Hamas being smuggled into Gaza.
Mrs Blears, then Communities Secretary, said the ban on the MCB - which was once considered the Muslim group closest to Labour - would remain in place until a firm stance was taken against Dr Abdullah.
But, despite Dr Abdullah retaining his post, the new Communities Secretary John Denham yesterday said the MCB would be invited back into the fold.
It will attend Government conferences and take part in consultations over policy.
The only restriction is that Dr Abdullah will not himself be allowed to attend the meetings.
Officials said Mr Denham had made the decision after the MCB stated its opposition to violence.
But critics accused the Government of capitulating for fear of losing votes at the upcoming General Election.
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Tory MP Paul Goodman said: 'It is a surrender to extremism by a bunch of politicians who are scared witless over losing their seat and are prepared to compromise real cohesion and real integration in order to appease an organisation that remains tainted.'
Labour's relationship with the MCB - which acted as a key adviser to Tony Blair in the wake of the July 7 attacks - has lurched between being very close and frosty in recent years.
In 2006, ministers decided to distance themselves from the group in frustration at the MCB's refusal to attend Holocaust Memorial Day.
But after agreeing to drop their opposition, it was welcomed back into the fold a year later. Last January, however, tensions again exploded when the MCB launched another boycott against the memorial day in protest at the Israeli action in Gaza.
These were heightened further when Dr Abdullah, who has also served as a member of the Government-backed Mosques and Imams National Advisory Board, was one of 90 Muslim leaders around the globe who signed the controversial 'Istanbul declaration'.
It said: 'The obligation of the Islamic Nation [is] to regard the sending of foreign warships into Muslim waters, claiming to control the borders and prevent the smuggling of arms to Gaza, as a declaration of war, a new occupation, sinful aggression.
This must be rejected and fought by all means and ways.'
The declaration was interpreted as calling for violence against Israel and condoning attacks on British troops.
Last night, a spokesman for the Department for Communities and Local Government said: "The Muslim Council of Britain has made a commitment to Government to examine their internal processes and ensure that the personal actions of all members, including senior leaders, remain true to the organisation's agreed policies, avoiding a repeat of the issues which arose after one member signed the Istanbul Declaration.
'The MCB has stated its categorical opposition to attacks on British defence interests and confirmed its unwavering support for British troops across the world.
'It has also made clear that it stands firmly against anti-Semitism and other forms of racism.'
The significance of these actions on the part of the MCB has led to the Government lifting the suspension of its formal relationship with that organisation.
The MCB will now contribute to ongoing dialogue with Government as one amongst a wide range of Muslim organisations.
'We will closely monitor how the internal processes progress over the coming months.
There is as yet no word from the Tories on this decision. But Paul Goodman, who was until the end of this year the Tory spokesman on these issues, has slammed the decision as "appeasement of extremists by a bunch of politicians scared witless of losing their seats."
One thing to watch for is whether the MCB attends Holocaust Memorial Day this year. If it doesn't, it will highlight just how wrong-headed the government's decision is.
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