The British government has launched a new campaign to promote London as a centre for Islamic finance.

The UK's first Islamic Finance Task Force is aimed at cementing the city's status as the Western hub and preferred choice for the Muslim world to invest in and do business with.

"This government's priority is to make sure that Britain is open for business. The Islamic Finance Task Force is a perfect example of our ambition to promote London as a leading financial centre and attract inward investment for the wider economy," said Greg Clark, financial secretary to the UK Treasury and co-chair of the task force.

In an attempt to counter growing competition from global Islamic hubs such as Dubai and Kuala Lumpur, the new task force will support the development of the UK’s Islamic finance sector and increase inward investment.

The World Islamic Economic Forum, to be hosted here in October for the first time outside Asia or an Islamic city, will be the new team's major focus.

"We expect the global market for Islamic financial services to experience significant growth over the coming years, but feedback from decision makers in the Middle East and South-east Asia suggests there is a lack of awareness of the UK industry and that we should be doing more to promote the sector," said Baroness Sayeeda Warsi, senior minister of state at the UK’s Foreign and Commonwealth Office and the second co-chair of the task force.

"There are also major opportunities to attract investment into the UK as demand for Islamic finance increases from private investors and Sovereign Wealth Funds," Warsi added.

Britain's minister of trade and investment, Lord Green, and minister of state for international development Alan Duncan will provide additional ministerial support to the team.

The new body will also include major industry figures to ensure that the banking products on offer are promoted by both the public and private sector.

Its key objectives set out by the UK government include acting as ministerial champions for the World Islamic Economic Forum, engaging with the United Kingdom Islamic Finance Secretariat (UKIFS) and other key units to promote and raise the international profile of the industry, and to use Islamic finance to facilitate inward investment and strengthen the UK economy, including through ongoing support for Sovereign Wealth Funds looking to invest in Britain's infrastructure.

Islamic finance refers to banking products that are similar to conventional banking products but consistent with Sharia principles on interest, with a strong focus on asset based as opposed to currency based finance.