Men in camouflaged military gear battle opponents wearing shemaghs - the traditional headdress of Arab men - at Zulu 1 Tactical Airsoft Simulations.
Participants use replica machine guns, pistols and sniper rifles which fire 6mm BB rounds at a 20-acre former RAF hospital in Nocton, Lincs.
Images from the company's website show soldiers pointing rifles at hooded "Arab" men spreadeagled on the floor following close quarter battles.
Founders Peter Jenkins, 41, and Darren Howells, 42, denied the use of Arab headdress was racist, claiming it was the "easiest way to tell who the enemy are."
Last Mod: 09 Nisan 2008, 14:40
But the Muslim Association of Britain slammed the scheme as "short-sighted and foolish."
Executive member Mokhtar Badri said: "Any sort of game that associates guns and violence with a particular culture is clearly wrong.
"They could use any other type of colour or dress to tell between teams which would not cause offence.
"Using Arab dress, especially in the current climate, is short-sighted and foolish.
"And regardless of the offence causes, young people should not be given the opportunity to play in an environment where guns are being glamourised."
Launching with a grand opening on May 25, organisers are planning a series of battles between 120 men over woodland, trenches and disused buildings.
They will be split into teams with one half wearing the shemaghs for identification.
Members as young as 16 pay a £30 joining fee and receive an hour of health and safety training before battle.
Over 40 have already signed up for the battle opening.