A British public holiday to mark the festival of Eid would be an “amazing” chance to promote cohesion between British Muslims and their non-Muslim neighbours, an Islamic leader has said.

Muhammad al-Issa, head of the Muslim World League, which aims to improve understanding of Islam, was the first prominent Muslim leader welcomed to the Palace by the King.

Al-Issa said that many British people already wished their Muslim neighbours a happy Eid.

“British identity does not conflict with Muslim identity at all,” he said at the Words Matter conference on the dangers of disinformation. The event was organised by the Oslo Centre, which focuses on peacebuilding.

Asked whether the government should consider making Eid a national public holiday for everyone, including non-Muslims, to take a day off, Al-Issa said he welcomed the suggestion.

“I wish that there is an Eid holiday, a holiday like any other holiday. It would be something very amazing,” he said. “British values support such a thing — at the moment many British people ... congratulate Muslims on their Muslim holidays and celebrate with them and attend Ramadan iftars.”

The league will devote £100,000 as a first tranche of money to international projects to promote social cohesion.