The leader of France's National Front has praised David Cameron for what she says is an endorsement of her party's far-right views on multiculturalism and immigration.

Marine Le Pen was elected to lead the National Front last month. She claimed the prime minister's speech on the failures of multiculturalism showed he was taking Britain's Conservatives towards her stance on the issue. "It is exactly this type of statement that has barred us from public life [in France] for 30 years," she told the Financial Times. "I sense an evolution at European level, even in classic governments. I can only congratulate him."

Germany's chancellor, Angela Merkel, was among European leaders listening to Cameron's speech in Munich at the weekend. He is accused of having played into the hands of rightwing extremists by talking of the failings of multiculturalism within hours of one of the biggest anti-Islam rallies ever staged in Britain.

Cameron called for a new "muscular liberalism", promoting British values and national identity. A policy of "passive tolerance" had only served to encourage Islamist extremism, he argued.

Marine Le Pen is daughter of the former National Front leader Jean-Marie Le Pen. She told the FT it was "indisputable" Cameron was moving the Conservatives closer to the traditional positions held by her party. A Conservative spokesman said she had "clearly failed to understand the prime minister's speech".

Cameron told the Munich Security Conference, attended by world leaders, that state multiculturalism had failed in this country and pledged to cut funding for Muslim groups that failed to respect basic British values.

He warned other European leaders that they needed to "wake up" to the threat of Islamist extremism and the radicalisation of Muslims inside their nations' borders.

He blamed the radicalisation of Muslim youths and the phenomenon of home-grown terrorism on the sense of alienation that builds among young people living in separate communities and the "hands-off tolerance" of groups that peddle separatist ideology.

Muslim and anti-fascist groups questioned the prime minister's judgment and sensitivity to the issues, saying he had handed a propaganda coup to the hard-right English Defence League as 3,000 of its supporters marched through Luton chanting anti-Islamic slogans.

In opposition the Tories began considering the policy on Muslims, which critics say risks branding many as extremists even though they do not espouse violence.

Critics say it is based on flawed neo-Conservative thinking and risks backfiring, while supporters say it is necessary to tackle those who are fellow travellers with violent extremists.