Letwin said Sikhs shared Tory "values

Oliver Letwin also called for the Commission for Racial Equality (CRE) to monitor members of the religion as a separate ethnic group.

The Sikh Federation was launched during a three-day conference of the National Sikh Convention at the Guru Nanak Gurdwara temple in Blakenhall, Wolverhampton.

The party will not field its own candidates, but intends to set up offices in areas with significant Sikh populations, lobby politicians, and back parties willing to address its concerns in the UK and abroad.

The party will be allied to another new lobbying body representing the country's 250 plus Sikh temples, the Sikh Advisory Group.

I think for too long Sikhs have been fairly quiet on the issues that matter to them Dabinderjit Singh, Sikh Secretariat British Sikhs find their voice

And its agenda includes calls for greater Sikh representation in public life, single faith schools in the UK and self-determination in the Punjab.

About three quarters of the UK's 340,000 Sikhs are thought to vote Labour.

BBC religious affairs reporter Martha Doyle said the formation of the new party will be seen as a warning to the government that the Sikh vote cannot be taken for granted.

She said it would be a political party with a small 'p' - one which hoped to encourage existing politicians to take seriously the issues of their community.

Mr Letwin told delegates he was astonished the government and the CRE "continued to refuse to acknowledge Sikhs as a grouping worthy of recognition along with other ethnic minorities".

"Whatever the government think, or the CRE think, I don't think that 10,000 people here today are invisible."

The Sikh Federation will be a political party with a small 'p'

Wearing an orange turban, Mr Letwin said Sikhs shared Tory "values of family, community, service to others and self-reliance" and were "making things happen" in Britain's inner cities.

And he praised their efforts to promote harmonious race relations.

"You are showing a commitment to public life and to British, liberal, democratic values."

Among the largest and most economically active ethnic groups in the country, Sikhs made an enormous contribution to business and many professions, Mr Letwin added.

And he promised the Tory party would try to ensure the British National Party (BNP) "does not make any further political progress".

Britain's Sikhs want their concerns to be heard

"Since the atrocity on September 11 2001, a number of Sikhs have been the victims of racial violence.

"The extremists of the BNP do not only threaten ethnic communities, they threaten us all and they threaten Britain's proud status as a tolerant and liberal nation."

West Midlands Liberal Democrat MEP Liz Lynne told delegates her party would "work with you for the just solutions to your problems that you deserve".

"We owe a great debt of gratitude to the Sikh community - the contribution that you have made to all levels of society is immense."

Monitoring Sikhs as a separate ethnic group was vital to providing government services effectively, Ms Lynne added.