The Netherlands' example as a successful, tolerant, multicultural community has taken a dent with the publication of a parliamentary report saying Dutch society is becoming increasingly polarised, with huge ethnic ghettos and subcultures tearing the country apart.
It is an issue which has been simmering away for years, but only made the headlines two years ago when the radical politician Pim Fortuyn, who was later assassinated, called for an end to immigration.
He said immigration, especially from Muslim countries, was diluting Dutch liberal values.
Now the all-party parliamentary report has reached a similar conclusion. It says the attempt to create an integrated multi-ethnic society has failed.
The increase in the number of Muslims is raising concerns in some countries
While most immigrants had integrated well, it said, there were also growing ghettos of foreigners from countries such as Turkey and Morocco.
Even Dutch-born "foreigners" tend to marry within their own communities and find spouses in their parents' home countries.
The report blamed successive Dutch governments for what had previously been seen as a positive policy designed to make life easier for immigrants - allowing them to be taught in their native languages at primary school.
This had merely perpetuated their alienation and prevented them from integrating into Dutch society properly, it said.
In what would mark a reversal of a 30-year-old policy, the report recommended that the country's Muslims should henceforth effectively "become Dutch".
The city of Rotterdam, where almost half the population is of non-Dutch origin (and where Mr Fortuyn had his biggest following), has already pre-empted the report by bringing in measures to prevent the influx of more immigrants.
At the end of last year it sought to keep out poor immigrants by stipulating that newcomers must earn 20% more than the minimum wage. All applicants for a residence permit would have to demonstrate a good command of Dutch.
And no more political refugees would be accepted for four years.
Although the Dutch report deals broadly with "immigrants" and their effect on Dutch society, there is no doubt that it is Muslim immigrants who are seen as posing the biggest problem.
In this, there are similarities with France, where current moves to ban "religious symbols" in schools and public places are aimed primarily at banning the headscarf worn by many Muslim women.
Opinion surveys all over Europe have detected growing public distrust of Islam in the two years since the 11 September attacks on New York and Washington.
The US-led "war on terror" has been largely aimed at Islamist groups, inadvertently encouraging public perceptions of Muslims as being "incompatible" with Western society.
In the Netherlands (and elsewhere) there is talk of trying to create a "European" form of Islam - basically a secularised version, where private religious beliefs are tolerated but not any manifestations of Islam which undermine European laws and customs.
There is now a lively debate across Europe over whether assimilation or integration or multiculturalism is the most desirable way forward.
Holland seems to be lurching from the multicultural option - in which immigrants keep their own languages and cultures, at the risk of becoming ghettoised - to a policy of assimilation, by which newcomers lose all trace of their original identity and become indistinguishable from their "host" nation other than by the colour of their skin.
In the middle is the option of integration - practised with some success in the UK - whereby immigrants retain their distinct cultures but are also encouraged to become part of the general community.
With Belgium now also considering a headscarf ban, there appears to be a growing trend towards assimilation. It's a process that's already caused a storm among Islamic communities in Europe and abroad, and may be fraught with as many problems as the "opposite" policy of multiculturalism.
Trevor Phillips, chairman of the UK's Commission for Racial Equality, says the real enemy of integration is inequality: "The more we keep people unequal, the more they are likely to say, 'This society doesn't want us, it discriminates against us,' (and) they fall into the hands of extremists."