Sydney  - Leaders of Australia's 350,000 Muslims said Wednesday that racism was behind a Sydney council's decision to reject a proposal to build an Islamic school.

The project in Camden was controversial with the council receiving 3,500 complaints and having to hire security guards to ensure order at its meetings.

"I see this as a victory for racism," Muslim leader Kuranda Seyit said in a statement. "I am not sure where people get their information from and how they form their ideas, but I can bet you a dollar per resident that they have never actually met a Muslim before."

Camden Mayor Chris Patterson said traffic congestion, loss of agricultural land rather than religion swayed the council.

"We said all along religious issues, nationalistic issues, will not be entered into," Patterson said.

Ali Roude, president of the Islamic Council of New South Wales, also said racism was at work.

"We've seen a history of reaction from local residents against the establishment of places of worship and schools, so it wasn't a surprise," Roude told ABC Radio. "It does not help the image of Australia because we take pride as Australians as a country that's succeeded and set an example to the whole world that we can live together."

There are Islamic schools in all Australian cities, and like Catholic schools they received government support. (dpa)