The Malay rights group made the demand in a memorandum submitted to the ministry today.
Perkasa Wiranita chief Foziah Nawawi said The Star had made similar mistakes in the past but it crossed the line this time.
“We will not accept any more apologies from The Star as they may repeat the action even after apologizing.
“We urge the home ministry to immediately suspend their license to serve as a lesson to the company,” she said.
The Star carried on the front page of its Saturday issue a picture of Muslims performing the tarawih prayers below a report on terrorism with the headline “Malaysian terrorist leader”.
It published an apology on the matter yesterday.
According to the newspaper, it was its practice to feature pictures of Muslims performing tarawih prayers on the front page on the first day of Ramadan as a mark of respect for the holy month.
Four senior editors of the daily went to the ministry today after being summoned to give their statements over the incident.
Home ministry secretary-general Alwi Ibrahim has described the blunder by the newspaper as deplorable.
Johor Umno assemblyman Tengku Putra Haron Aminurrashid Jumat had earlier demanded that the owners of The Star revamped the editorial team of the newspaper to better manage matters relating to Islam.
He also called for stern action against the daily as it had hurt the feelings of many Muslims in Malaysia.
PAS information chief Nasrudin Hassan Tantawi said the Star’s front page was “extreme and rude” and he compared it to the incident of Chinese daily Nanyang Siang Pau which saw protests in April over a cartoon satirising PAS president Abdul Hadi Awang.
“It seems The Star is more brave and daring, an apology after repeated incidents is another mockery.” Nasrudin said.