A centre for the scholarly study of Islam has become the first Islamic organisation to receive a Royal Charter.

The Oxford Centre for Islamic Studies was granted the honour 27 years after it was set up, with the Prince of Wales hosting a reception to celebrate the historic achievement.

Charles, who is patron of the centre, hailed its work to improve understanding of Islamic culture.

He said: “It seems to me absolutely right that here in the UK we should do all we can to nurture an institution which not only promotes a better informed understanding of Islamic culture and civilisation and the challenges facing Muslim communities, but which can also remind both the Islamic world and the West of those timeless, universal principles of harmony enshrined within Islam that the world needs so urgently to re-discover in the battle to preserve the future for our descendants.

”Only from such understanding can we increase the dialogue, respect and tolerance which underpin our national values.”

But he admitted that “many of the potential problems” he warned of in his speech to the centre in 1993, entitled Islam and the West, had come to pass.

In that speech he cautioned against sliding “into a new era of danger and division because governments and peoples, communities and religions, cannot live together in peace in a shrinking world.”

He was joined by 150 guests at tonight’s reception at St James’s Palace in London, including a number of foreign dignitaries and British politicians.

Shadow Chancellor Ed Balls, Universities and Science Minister David Willetts, Attorney General Dominic Grieve and Minister of State Oliver Letwin mingled with the prime minister of Malaysia, Dato’ Sri Mohd Najib bin Tun Abdul Razak, and others.

Dr Farhan Nizami, director of the centre, said: “This is a most important and welcome moment and I would like, on this occasion, to thank warmly all those who have encouraged and assisted the centre’s development over more than 25 years.”

The Royal Charter, illuminated on vellum, was on display during the evening.

Such charters are granted by the Queen on the advice of the Privy Council.

The practice dates back to the 13th century, with Charles’s alma mater, Cambridge University, the first to receive one in 1231 - as the Prince was quick to point out.

Royal Charters are now normally granted only to bodies that work in the public interest and which can demonstrate pre-eminence in their particular field.

Oxford University and many of its colleges have a Royal Charter, as well as a range of other academic institutions across the UK.