The tourism ministry instructed all resort hotels across the nation's 1,192 tiny coral islands to shut their spas and health centres offering beauty treatments and massage with immediate effect.
The opposition Adhaalath party, a conservative religious movement whose website features an article criticising "lustful music," staged protests in the capital Male last week accusing spas of being used as brothels.
"An Islamic party has been agitating against spas hoping to embarrass the government," a senior government figure told AFP by telephone, confirming Thursday's ministry order but asking not to be named.
The tourism industry is a vital foreign exchange earner and employer in the Maldives, a popular high-end destination for well-heeled honeymooners and celebrities where luxury rooms can cost up to $12,000 a day.
The Indian Ocean country this year received more than 850,000 tourists, drawn to its secluded islands known for turquoise blue lagoons, as well as corals and reefs filled with multi-coloured fish.
The government bowed to the pressure less than a week after President Mohamed Nasheed called for a "tolerant" form of Islam in his nation of 330,000 people, who by law are all Muslims.
He urged Maldivians to reject religious extremism and support the more liberal "traditional form" of Islam that has been practised in the Maldives for centuries.
Despite the Islamic republic's reputation as a laid-back holiday paradise, burnished by frequent international marketing campaigns, there is growing concern about the influence of a minority of religious fundamentalists.
There have been anti-semitic protests recently about the transport ministry's decision to allow direct flights from Israel, while a restaurant that hung up Christmas decorations last year was also targeted.
In 2010, a marriage celebrant was filmed abusing a Western couple as "swine" and "infidels" in a religious-tinged hate speech during a ceremony conducted in the local Dhivehi language.
Most recently, UN Human Rights chief Navi Pillay has sought to highlight the plight of Maldivian women who can be publicly flogged for having extra-marital sex.
Industry sources said they expected the government to revoke the decision on spas considering the huge revenue earned from the business.
The deluxe Huvafen Fushi, where an ocean view room can cost $10,440 per night, told AFP Friday that their spa was open on Friday and they were accepting bookings for the New Year.
"We have heard of this report, but our spa is open," a Huvafen Fushi manager said. The hotel boasts the world's first underwater spa treatment rooms where guests have a close up view of marine life.
The government move to shut spas will directly affect an opposition leader, Gasim Ibrahim, head of the Jumhoory Party, who owns five, the independent Minivan news website reported.