The institution's Sheikh Mohammed Sayed Tantawi accused Egypt's ministry of culture of breaking the law by failing to consult them before publishing a new edition of "Feast of the Sea Algae" by Syrian writer Haidar Haidar.
The book's publication sparked violent demonstrations at Al-Azhar University earlier this month that left around 50 students and six policemen injured and more than 100 demonstrators arrested.
Haidar's book "incites unrest and shakes the cohesion of national unity," Tantawi said in a statement, obtained by AFP, giving the results of an investigation into the book by Al-Azhar's Academy for Islamic Research.
"The novel is full of phrases and expressions of contempt that scorn all that is sacred in religion," including God, the prophet Mohammed and the Muslim holy book the Koran, said Tantawi.
The sheikh of the thousand-year-old institution is considered close to the government of President Hosni Mubarak.
Tantawi quoted passages in the book that describe God as a "failed artist," criticise Mohammed for marrying "more than 20 women" -- while Islamic tradition says he married only a dozen times -- and attributing false passages to the Koran which Muslims consider the unalterable word of God.
The novel, first published in 1983, "calls on people to have unlawful sex and shamelessly uses unrepeatable expressions for sexual intercourse and the male and female sexual organs," the department's investigation found.
Haidar denies the book is blasphemous and says passages of the work have been taken out of context. "My novel is clear. It reflects the feelings of an ordinary Arab in despair over the Arab defeat by Israel in 1967," he told AFP last week.
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