Schools that have predominantly white or Asian pupils could damage local communities and should be avoided, a Home Office-funded report says.
Researchers from Lancaster University questioned 400 15-year-olds in Burnley in the wake of the town's 2001 riots.
The report found non-mixed schools perpetuated extremist attitudes among white pupils and did not prepare Muslim Asians for possible prejudice later.
Its authors said the problem could be solved by encouraging mixed schools.
The report is the result of a two-year study by the Department of Religious Studies to help work towards bringing communities together in Burnley.
The mono-cultural school in towns like Burnley should be avoided wherever possible...
Muslim pupils 'more tolerant' (NWN: Well of course !)
The town was the scene of race riots in 2001, involving violent clashes between gangs of youths.
Its aim was to look at the contribution that interfaith understanding could make to community cohesion.
Canon Dr Alan Billings, one of the authors, said: "The mixed school should be seen as a form of interfaith activity in itself."
Dr Billings said it was probably the most effective way of "ameliorating illiberal attitudes among some young white people".
He said it would also help young Muslim Asians learn how to deal with prejudice by encountering low-level racism early on in their lives.