The Prime Minister also revealed parents will be able to cancel their children's passport if they're at risk of travelling to join Islamic State.
In a speech in Birmingham, Mr Cameron outlined what he called the "warped" extremist ideology, the process of radicalisation, the "drowning out" of moderate Muslim voices, and the "identity crisis" among some British-born Muslims.
He also talked about Britain as a "multi-racial, multi-faith democracy" and as a "beacon to the world". He said no-one should be demonised and moderate Muslims also hated the "sick world view" of extremists.
Reflecting on the issue, Rt Revd Donald Allister, Bishop of Peterborough said: "Where we haven't quite got it right is enabling them to feel fully involved and more integrated with our society, I think that the danger of keeping people in separate communities is part of what's led to the problem or made the problem more obvious."
The government has said it also wants broadcasters not to interview Islamic State sympathisers, something Bishop Donald supports: "I'd love to see the media for example regularly interviewing honest decent good peace-loving Muslim leaders and asking their views.
"Don't just ask white people their views about extremist bombing, ask Muslim people their views and let that be heard, and then you'll discover Muslim people think the same as we do; except they have a higher degree of fear that they might be blamed for it, so basically love your Muslim neighbour," he added.
Critics have compared the governments' latest strategy tackle extremism and protect Britain from Islamic State to failed policy from the past.
"They (the government) haven't prevented trying to commit terrorism, they haven't prevented people from imbibing terrorist ideology, they haven't prevented hundreds of Muslims in the UK from going to the Islamic State, so in what way is this going to be any different....?, I really don't think it's going to work," said Dr Anthony McRoy, lecturer in Islamics at the Wales Evangelical School of Theology to Premier.
The Prime Minister said the government's strategy included plans to:
-Get internet giants to step up measures to protect against online radicalisation
-Should not be "passive tolerance" in communities of female genital mutilation and honour-based violence
-Promised to consult on giving victims of forced marriage lifetime anonymity
-Criticised university leaders for allowing extremist preachers to give speeches on campuses branding it "misguided liberalism"
-Attacked the National Union of Students for allying itself with an organisation which referred to Jihadi John as a "beautiful young man"
-Said conspiracy theories on 9/11 and 7/7 should be ridiculed
