The Government should stop claiming Islam is a religion of peace in the light of the Trojan horse allegations, a former leader of Ukip has said.

Lord Pearson of Rannoch said the problems could only be cured from "within Islam".

An investigation led by former anti-terror chief Peter Clarke today reported there had been a deliberate effort to introduce an "intolerant and aggressive Islamic ethos" into a number of Birmingham schools.

The damning report, commissioned by former Education Secretary Michael Gove in April, was highly critical of Birmingham City Council, accusing the authority of failing to support under-pressure headteachers dealing with inappropriate behaviour by governors.

Ukip former leader Lord Pearson of Rannoch asked Education Minister Lord Nash in the House of Lords: "Do you not agree that this scandal like Muslim segregation and Islamist violence more generally are problems which arise from within Islam and can only be cured from within Islam?

"Given all that is happening in Africa as well, why does the Government go on intoning that Islam is a religion of peace?"

Lord Nash, who had repeated Education Secretary Nicky Morgan's statement on the issue, told him: "I think that what happened in Birmingham was unacceptable to all communities in Birmingham including all the Muslim parents and teachers. I don't recognise your analysis of the religion of Islam, which I see as a religion of peace.

"I do think there are issues of developing narratives of counter-terrorism, but I don't think there is time to go into that here."

Liberal Democrat Baroness Hussein-Ece said the report had found no evidence of a "plot" or "violent extremism" in contrast to "lurid headlines".

She added: "We know there is a difference between religious extremism and religious conservatism and that hasn't really come out in a lot of the narrative in these schools. I think that has been quite damaging.

"We need to refrain from the generalisation we have seen that stigmatises whole communities and faiths.

"This has been very damaging and will make it more difficult to get moderate people from the Muslim communities and other communities who want to become involved in British civic life and become school governors and councillors."

Lord Nash said she was right to draw a distinction between extremism and conservatism and said all pupils needed to be taught about "inclusiveness".

Labour's Lord Rooker, a former minister and Birmingham MP, called for the city to be split into three boroughs.

"London is no less London for having 32 boroughs dealing with social security and education," he said.

And he added: "With wards of 20,000 electorate for three councillors in that city compared to 6,000 electorate for three councillors in London, there is a disconnect in democratic accountability.

"The councillors can not possibly be in touch with things that happens on their patch.

"It is the only place in the country that has such a democratic dislocation on the ward level between councillors and the electorate."

He said the result would be more people would "know what is going on".

Lord Nash said "all possible solutions" were under review.