Jewish and Muslim groups have called for press regulators to rewrite a code of conduct after the Independent Press Standards Organisation rejected complaints about an article in The Sun which referred to “the Muslim problem”.

Despite an IPSO panel finding that columnist Trevor Kavanagh’s comments could have caused “serious offence” it found there had been no breach of the code, leading to confused looks at Jewish and Muslim organisations.

“This decision suggests the [editor’s] code is unfit for purpose and is in urgent need of redrafting,” said Board of Deputies’ vice president Marie van der Zyl.

In its complaint, made back in August, the Board – together with Islamophobia monitor Tell MAMA and interfaith group Faith Matters – said the language harked back to that of pre-war Germany.

“The printing of the phrase ‘The Muslim Problem’ – particularly with the capitalisation and italics for emphasis – in a national newspaper sets a dangerous precedent, and harks back to the use of the phrase ‘The Jewish Problem’ in the last century, to which the Nazis responded with ‘The Final Solution’ – the Holocaust,” they said.

In its ruling, however, an IPSO spokesman said: “There is no clause in the Editors’ Code which prohibits publication of offensive content. It was clear that many, including the complainant, were offended by this aspect of the article, but there was no breach of the Code on this point.”

Stunned by the decision, the Board said it was “incomprehensible that the committee could at once acknowledge that the article was capable of giving serious offence, given it could be interpreted as a reference to the rhetoric preceding the Holocaust, and yet conclude that there was no breach of the code”.

Van der Zyl added: “The IPSO code clearly needs to be reviewed to protect minority groups, not least from comments that echo the tone of Nazi propaganda.”