France is embroiled in a bitter row over how to resolve its issues surrounding race after Nicolas Sarkozy's new diversity tsar suggested breaking one of the republic's biggest taboos and legalising the counting of ethnic minorities.

Unlike in Britain or the US, where people are often asked to tick a box about ethnic origin, in France it is illegal to classify people by ethnicity or to ask census questions on race or origins. The foundation stone of the secular French republic is that all citizens should be equal and free from distinctions of class, race or religion.

Sarkozy recently went further than any other French president to denounce the hypocrisy of everyday racism and discrimination, which has poisoned that republican ideal. He said the lack of data on ethnic minorities was hampering the ability to measure inequality and deal with it.

Meanwhile, race campaigners describe a society plagued by discrimination, where non-white French citizens with "foreign-sounding" names are routinely discriminated against in education and employment, or targeted by police stop and searches. Even state housing authorities have been found guilty of denying flats on the grounds of race.

Yazid Sabeg, a businessman of Algerian-Berber origin appointed by Sarkozy to advise on tackling discrimination, will today launch a commission to examine ways of officially collecting statistics on France's ethnic make-up for the first time. But the proposal has created such a political row that it is unclear whether Sarkozy could shelve any future plans.

Sabeg was due to hand a report to the president on Friday detailing his recommendations, but it was indefinitely postponed by the Elysée, which blamed presidential "diary commitments".

Sabeg has warned that discrimination in France is so acute that the nation was becoming "an apartheid state".

He said data collected on minorities would be voluntary and anonymous. People would not be made to tick a box by human resources departments, but instead in surveys would be asked to define what "community" they felt they belonged to, such as black, white, north African or Asian.

This caused outrage from both left and rightwing politicians and intellectuals in France, where the very word "community" is seen as an affront to the republican ideal. The British approach of multiculturalism is seen as dangerously divisive.

"Our country must not become a mosaic of communities," said Fadela Amara, the left-wing junior minister for urban affairs.

French history bears heavily on the debate. The 1978 law that bans collecting ethnic data has roots in France's shame over collaboration with the Nazis during the second world war, when Jews were marked with yellow stars and sent to death camps.

"No one else should ever wear a yellow star," Amara added.