Prime Minister John Howard described a sermon by Sheik Taj Aldin al-Hilali, in which he compared immodestly-dressed women to "uncovered meat" inviting sexual attack, as "quite out of touch with contemporary values in Australia".
Hilali's remarks have served to strengthen Howard's hand as he pushes for a controversial citizenship test in which immigrants will be required to sign a pledge of allegiance to Australian values.
Howard said last month when he announced plans for the test that these values include democracy, the rule of law and the equality of men and women.
The prime minister denied that the move was aimed particularly at Muslims, but he has also expressed fears that Muslims who do not integrate fully into Australian society could launch terror attacks in the country.
Several leaders among Australia's 300,000 Muslims moved swiftly to distance themselves from Hilali's remarks last week, making it clear they feared a backlash from non-Muslims.
An editorial in Sunday's mass-circulation Sun-Herald newspaper supported their concerns, saying: "Al-Hilali has made too many outrageous, inflammatory statements for this one to be forgiven."
The paper, noting the "tension between the Muslim community and the rest of Australia", joined widespread calls for Hilali, who has the title Mufti of Australia, to be sacked.
Muslim Council of New South Wales chairman Neil Kadomi, who supports moves to depose Hilali, told AFP that Islam did not contradict Australian values.
"Islam stands for racial harmony, working for a living, freedom of speech, freedom of religion and racial equality and gender equality," he said.
"When every politician wants to score a point he picks on the Muslim community," he said. "It's unfair. Why pick on Muslims -- why not Jews, Christians?"
The government's drive for a citizenship test has also been criticised as affecting more than just the Muslim community, threatening a multicultural society forged by centuries of immigration.
"It's undermining and insulting to all Australians to have the charge being led by a prime minister who has never been noted for his acceptance of multiculturalism," said Edna McGill of the Ethnic Council of New South Wales. For two centuries Australia had benefited from successive waves of immigrants, said McGill, an Australian of Scottish heritage.
"To say suddenly we don't want those people unless they make some formal commitment to conform to what politicians say they should be doing is ridiculous."
Howard's plans simply failed to reflect a society that was much more diverse and inclusive than he portrayed, McGill said, adding that not everybody in Australia had to worship sport. This touches an issue that has provided endless material for satirists and cartoonists here -- what exactly are "Australian values".
Many have suggested that a love of booze, bikinis and barbecues would have to feature on the list.
A cartoon in The Sydney Morning Herald showed immigration officials timing how long it took prospective settlers to down a six-pack of beers, with worried looking Muslim men and women waiting in line.
The paper also reported that Howard had not ruled out the possibility of his major sporting passion, cricket, being included in the test.
Under the headline "Cricket is NOT an insect. Go Home", the paper quoted Howard as saying that to understand Australia's history it might be necessary to have some knowledge of the arcane game.
Comedian Dave Hughes said in the Sun-Herald magazine a week before the latest row erupted: "All new Australians should have to have respect for girls in bikinis. They should have to cherish them
"Their only god is to be sport. It can be any sport they like as long as they are fanatical about it."

Copyright AFP (Agence France-Presse), 2006