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Muslim communities should have the right to decide their own disputes provided they are subject to our laws, one of Britain's most senior legal figures has said.

Lord Bingham of Cornhill, who has recently stepped down as senior law lord, said he could see "no reason" why a devout Muslim, provided he or she was "acting voluntarily and without coercion", should not choose to submit a family dispute to a Muslim cleric.

That would be no different from a Jewish family submitting their dispute to be decided by a Rabbi or a Christian to a Church of England to an Anglican priest or marriage counsellor, he said.

But Lord Bingham, addressing the annual Bar Conference in London, made clear that there could be "no question" of any decision not being subject to the law of the country; nor of those involved forfeiting their rights to go to a court of law, he said.

He also emphasised that any such decision to have a dispute handled in this way as is already happening with Sharia councils in certain communities would have to be entirely voluntary.

Lord Bingham, who was making his first intervention on the controversial topic of the place of Sharia within the English legal system, said later that if a decision made within a local community came before the courts for approval, judges would have to ascertain - as they did in many cases - that the parties had not been put under pressure.

Last week Bridget Prentice, a Justice Minister, said that people who had disputes decided under Sharia law had the option of having them brought before judges to be ratified.

Jack Straw, the Justice Secretary, later made clear in a separate speech that there was no question that Sharia rulings were subject to UK laws and could not take precedence.

Lord Bingham said that it was encumbent in an increasingly diverse and multi-racital society that the "legal system should operate in an inclusive way and that everyone should feel it belongs to them".

Diversity in Britain had always existed and any notion of it as a "pure-bred, monoglot, homogeneous society" could be dismissed as fantasy, he said.

But four changes had occured in recent decades: first, those coming from abroad to settle in the UK in the past half century vastly outnumbered previous groups of immigrants.

Second, they came from societies — particularly the Indian subcontinent, Caribbean and East Afria — "more different from our own than those from which most previous immigrants have come" and in very substantial numbers, which were concentrated in certain places.

The third factor was a tendency to recognise that even groups that had always been part of our society had specific rights, such as women and children, he said.

Finally there was much greater protection given to minority rights by international conventions and the right response to diverse interests of minorities as a matter of international obligation, he said.

What was the right legal response, he asked?

Lord Bingham rejected the "full-blooded assimilation" approach with minorities required to conform to the customsm, religion or language of the majority.

But equally unacceptable was an approach that gave minorities "an unfettered right to indulge their own customary, cultural or religious practices no matter how offensive these might be to the traditions of the majority".

"We would not be willing to tolerate the binding of women's feet . . . however important this may have once been to Chinese cultural tradition."

The appropriate legal response must lie between the two extremes, he said — a policy described as "cultural pluralism within limits".

"In other words, membesr of minority communities should be permitted and encouraged to follow their own cultural, religious, linguistic and customary traditions up to, but not beyond, the point at which some significant majority value is jeopardised."

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