Faith-based schools in Britain are not new: those of a Christian and Jewish tradition have existed for centuries. What is different now is the development of a new type of faith school based on Islamic, Sikh and Hindu traditions within a British context. As we move beyond those of a Christian character, issues of race and ethnicity emerge which have provoked fearsome debate about the wisdom of expanding this type of faith-based school. This is because expansion comes at a time of increasing concern over whether segregated schooling fosters a climate of ignorance and hostility among the young. Historically, Christianity is embedded in the State education system in Britain and other European countries, and Judaism became an acceptable part, but the same may not be said of others. Why is it we look at some faith-based schools differently from others? What makes Muslim, Sikh and Hindu schools different? At the heart of the debate is the question of segregation and social inclusion, and as faith-based schools expand, we should be asking, what are the issues for all schools? There are different levels of diversity in society, for example religious, cultural, socio-economic, or special needs. To what extent do faith-based schools mirror this diversity, or indeed wish to? Community schools in some geographical locations are mono-cultural so the issue of responding to cultural diversity again has implications for all educational institutions. .The growth of faith-based schools has signalled a clear change of direction as a number of religious communities have begun to question the efficacy of secular schooling for all. Statistically, there are over 7,000 government funded faith-based schools in Britain today and they consist of: 4,800 Anglican, 2,000 Catholic, 32 Jewish, 4 Muslim, 2 Sikh, 1 Greek Orthodox, and 1 Seventh Day Adventist. For the purpose of this paper, we have focused on our recent empirical research of Muslim, Sikh and the non-funded Hindu schools. * Collectively they highlight issues of religion, race and community, and the importance some parents place on perpetuation of cultural heritage. Drawing on other examples from the Netherlands and Denmark, the discussion explores the development of schools which can be characterised as faith-based and representative of ethnic minorities. In Britain this has been led by the development of Muslim schools, but we have also conducted research in Sikh and Hindu schools which are examined in the paper. Finally, we explore the tension between providing for parental choice within a multicultural context, and developing a shared sense of citizenship and social cohesion in the light of global unrest.