The recent decision to award government funding to two independent Muslim schools in Britain has brought attention to the use of public funds for private institutions. This paper provides an overview of the movement for equal treatment of Muslim institutions and explores the issues surrounding equitable treatment of religious minorities. The paper consists of four parts: (1) a historical perspective of the Muslim population in Britain; (2) the development of education in Britain along denominational lines; (3) the establishment of Muslim Schools and their attempts to receive public funding; and (4) a discussion of the issues emerging from the recent decision to fund Muslim schools, its implications for education, and effects upon cultural pluralism. Research by Anwar (1993) and Sarwar (1994) estimates the Muslim population at 1.5 million, one-third of whom are school-age children. Since the Education Act of 1993 contains provisions for government support for schools formed by voluntary groups, it is suggested that racial segregation and religious apartheid contradict government rhetoric concerning multiculturalism. Equity before the law is the fundamental issue. The most important emerging issue is thought to be the shifting of sociocultural and economic contexts within which religious and ethnic minorities operate. (Contains 40 references.) (RIB)