French officials have called for a revision for a century-old law on the separation of church and state, to allow government bodies to subsidise mosques.
An estimated five million Muslims live in France - making Islam the country's second religion.
The vast majority worship in small, makeshift premises, rather than purpose-built mosques.
Some French officials say local authorities should be allowed to help provide decent places of worship for Muslims - but many others remain unconvinced.
A 1905 law - which many in regard as the cornerstone of France's secular state - prohibits government funding of religious bodies.
However public funds can be used for the upkeep of Roman Catholic churches built before 1905 - which were taken over by local authorities.
Pierre Bedier, a junior minister in the current conservative government, says the law needs to be updated.
"Secularism is necessary, but the way it is implemented must evolve," he told Le Monde newspaper.
Mr Bedier says a change is needed because French Muslims are turning for money to Arab governments with fundamentalist leanings.
"I find it healthier that mosques should be financed through public funds, rather than by those states," Mr Bedier is quoted as saying by Le Monde.
Contentious
Interior minister Nicolas Sarkozy, who has encouraged the creation of a council to represent French Muslims, has not taken position on the issue of public funding of mosques.
But government spokesman Jean-Francois Cope has called for "new thinking" on this.
"You cannot at the same time oppose foreign funding of places of worship and do nothing," he told Le Monde.
However, a change in the 1905 law would be hugely controversial. Many politicians of both the right and the left remain attached to the traditional concept of the secular state.
A revision of the 1905 law "will not go down well," socialist MP Christian Bataille told Le Monde.
"It would open lead to enormous expenses," Jean-Claude Gaudin - the conservative mayor of Marseille, a city with a high Muslim population - is quoted as saying.
There are about 1,600 mosques and Muslim prayer halls in France. Most are less than 30 square metres (300 square feet).