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<p>The UK Government has recently announced a new <em>Counter-Terrorism and Security Act 2015</em> to facilitate tackling the threat of violent extremism. In light of this and previous initiatives, this paper provides a critical assessment of UK counterterrorism policy. This policy has created a notion of ‘suspect communities’ such that it has alienated young Muslims at the community engagement level, conceivably and empirically, potentially further exacerbating concerns government and communities have over questions of radicalisation, extremism, and the associated political and criminal violence. This paper argues that such policies can lead to the institutionalisation of Islamophobia, acting as an echo chamber for far right extremism to flourish. Significant gaps in government policy in this area can only be addressed by fostering effective relations between communities and policy makers, with enablers such as police officers, youth workers, activists and faith leaders empowered to formulate nuanced approaches in various local area settings. Given the social, cultural and political situation regarding British Muslim youth, including those presently thought to be fighting in parts of Iraq and Syria, as well as ongoing threats on UK soil presented as imminent and dangerous by UK government, there remain acute challenges with limited opportunities.</p>