Mosques in France will be built using government money in an attempt to stop Muslims places of worship being funded by radical overseas groups.

The French Muslim Council (CFCM) proposed a new foundation for the construction and running of mosques, paid for by fees from the halal food sector. The French interior minister Bernard Cazeneuve backed the idea and said he wanted it launched in October.

France has the largest Muslim population in the European Union and currently bans the use of public money for places of worship. But the Prime Minister Manuel Valls has said he wants to stop mosques being built with overseas funds.

Cazeneuve said 20 Muslim places of worship had been shut recently due to allegations of extremism. "There's no room in France for those who call for and stir up hatred in prayer rooms or mosques, and do not respect the principles of the republic," he said. The French government wanted "total transparency" in how mosques were financed, while maintaining the state's strict secular principle, he added.

The debate over mosque funding was reignited after Catholic priest Fr Jacques Hamel had his throat slit by two men who claimed allegiance to ISIS. The terrorist group said they were responsible for the attack in which five were taken hostage during morning mass in a town near Rouen, northern France.

There is suspicion that overseas funding has encouraged the radicalisation of some Muslims and France's recent spate of Islamist-inspired attacks.

Anouar Kbibech, the head of CFCM, said on Monday: "Almost all Muslims of France are attached to a serene, open, tolerant Islam and they are fully respecting the values and laws of the republic."