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A tax accountant from Montreal who came under fire for proposing to build a Muslim residential community has temporarily shelved the project.

Nabil Warda cancelled a planned community meeting on the project after it sparked a backlash in Quebec.

Quebec Premier Philippe Couillard even weighed in from Morocco, where he is attending a climate conference.

But Mr Warda says his idea has been woefully misunderstood.

His proposal touched a livewire debate around religious accommodation and cultural identity that has been raging in Quebec for years.

The issue caught fire earlier this week when the media got hold of a pitch letter Mr Warda, 68, sent to people he thought might be interested in his proposal to build a planned community on a lot of land near Montreal's south shore suburb of Brossard.

It was aimed at Muslim homeowners who did not want to take out traditional mortgages because interest is banned in Islam.

Mr Warda saw a ripe niche market to propose an idea that he had been mulling for a while: an affordable community filed with like-minded souls where he could retire comfortably.

"I just went to where I thought I had the best chance to succeed," he said in an interview.

Non-Muslims would be welcome in the community if they shared the same values.

"In Canada, in Montreal, when there is a snowstorm, everyone becomes brothers. And I like this. When there is no snowstorm, nobody is my brother," he said, of the shared values.

He also supports modesty of dress.

"You want to wear shorts on the street? It's OK, sure. Wear shorts on the street. But why would you go live with people who are offended by the fact that you wear shorts on the street? Why provoke them?"

Quebec politicians of all stripes saw it differently.

On Tuesday, they passed a motion in the legislature asking the municipal affairs minister to send clear directives to towns and cities that developments should not be built based on religious or ethnic segregation.

"Discrimination can work in many ways, and inclusion can work in many ways,'' Premier Couillard said. "We are in favour of mixed housing for cultural communities as well as for religious groups. It's fundamental for us.''

Provincial health minister Gaetan Barrette was at first supportive, saying it seemed no different to him than Montreal's vibrant Chinatown or Italian neighbourhoods. He later reversed his position.

The Islamic Community Centre of South Shore has also distanced itself from the project, noting that Mr Warda only rented space in the centre to pitch the plan.

"We promote full integration within Quebec Society and we are proud Quebecers and Canadians," the centre said in a terse statement.

The meeting was cancelled after threats it would be picketed.

Mr Warda said he feels he has been falsely painted as an extremist with plans to build a religious ghetto.

"I do not intend tomorrow to grow my beard and to buy a Kalashnikov," he said.

He still wants the project to move ahead but is waiting for the furore to die down.