A mosque named in honour of the killer of a politician who called for the reform of Pakistan's controversial blasphemy laws is proving so popular it is raising funds to double its capacity.

The modest concrete building in the scruffy suburb of the Pakistani capital is named after Mumtaz Qadri, a former police bodyguard who in 2011 murdered Salaman Taseer, the governor of Punjab province whom he was supposed to be protecting.

Taseer had incurred public wrath by voicing support for Aasia Bibi, a Christian woman who had been sentenced to death for allegedly insulting the prophet Muhammad.

Mohammad Ashfaq Sabri, the prayer leader in charge of the mosque, said yesterday he needed to expand to keep up with demand.

"People love Mumtaz Qadri," he told the Guardian. "More and more people want to offer their prayers in this mosque."

The £7,500 they hope to raise will create a new prayer hall on the roof so that the 500 worshippers who regularly come for Friday prayers will no longer have to spill out on to the dusty lane outside in Islamabad's VIP Ghori Town.

Qadri is celebrated for emptying a magazine of bullets into the back of Taseer outside a coffee shop in an upmarket shopping district of the capital on a winter's day three years ago. Taseer had enraged many by describing Pakistan's antiquated blasphemy legislation as a "black law".

On Wednesday morning, one man among a handful offering prayers in the carpeted prayer hall said it would be unthinkable to alter laws he said were essential for protecting Islam from abuse.

"Everyone gives Mumtaz Qadri respect," said Ali Haider, a 27-year-old who runs a nearby mobile phone shop. "He was prepared to protect his religion and any one of us would have done the same."

It is a view widely held in Pakistan. When Qadri appeared in court after the killing, lawyers showered him with rose petals, while the judge who sentenced him to death had to flee the country.

The plot on which the mosque was built was donated by Taji Khokhar, a wealthy developer, Sabri said. With such widespread public support for Qadri, even those who regard the incident as an especially horrifying example of Pakistan's slide into religious intolerance have learned to keep quiet.

Today, few dare to discuss publicly the many problems of the blasphemy laws, which include the difficulty of examining evidence in court for fear of repeating a blasphemous statement, and the ease with which malicious allegations can be made.

Although the mosque was built three years ago, it attracted comment only this week from Pakistan's tiny caste of liberals after a resident highlighted its existence on Twitter. The news of Masjid (mosque) Mumtaz Qadri comes shortly after it was discovered that another Islamabad mosque – the infamous Lal Masjid – had named a small library after Osama bin Laden. Abdul Aziz, the high-profile mullah in charge, has publicly defenced the Pakistani Taliban, with whom he shares the aim of introducing strict Sharia law.

But whereas Aziz follows the austere Deobandi school of Islam ,which critics say fosters extremism and intolerance, the worshippers at the Qadri mosque are Barelvis, a branch of the religion heavily influenced by Sufi mysticism and generally considered a force for moderation and tolerance.

Some counter-extremism experts have even argued for Barelvism to be quietly supported by western powers to help it deal with the growing challenge from Deobandis and other radical sects, which are growing in popularity in Pakistan. Only a few weeks ago Sabri attended a large demonstration in Lahore against the Taliban.

Recently debate has raged over whether the army should be sent to clear militants out of their sanctuaries on the Afghan border, with firebrand clerics on the religious right staunchly opposed.

Sabri said the operation should have happened a long time ago. Although he regards Qadri as a hero, he believes the Taliban campaign of violence against both civilians and government forces cannot be condoned.

"That way of doing things is completely wrong," he said.