As alarm grew among ministers that the scheme could be defeated in Parliament, Tony Blair fuelled speculation of a possible government retreat or delay by agreeing to a private meeting on the issue with Michael Howard, the Conservative leader.
The Tories announced their outright opposition to internment under "control orders", which they warned would create martyrs, becoming a "very effective recruiting sergeant" for terrorists. They called for suspects to be brought to trial by allowing surveillance material to be admissible in court.
Mr Howard said: "If they are found guilty, they must be detained in a prison cell, not in their living rooms. That is the way to protect life and to protect the British way of life."
Under control orders, which would be authorised by the Home Secretary, terrorist suspects face a scale of restrictions, with the most serious put under effective house arrest.
But with opposition building across the political spectrum, Mr Clarke is also struggling to win support from fellow ministers. Legal officers have warned his plans could be vulnerable to a court challenge, while other ministers fear that pressing ahead with the scheme in its present form would provoke a major rebellion among Labour MPs. One said: "I'm worried whether we'll get it through the Commons, let alone the Lords. It's the last thing we need just before an election."
The plans were drawn up after the law lords declared the 2001 Anti-Terrorism, Crime and Security Act, which provided for detention of suspects without trial, was unlawful. It has been used to detain several terror suspects at Belmarsh prison in south-east London.
But critics say that replacing it with a measure that puts British and foreign nationals on the same footing is replacing one injustice with another.
Defending the proposals in the Commons, Mr Blair told the Tory leader: "What we are desperate to do is to avoid a situation where, at a later point, people turn round and say: `If you had only been as vigilant as you should have been, we could have averted a terrorist attack.'"
He warned there were problems of using intercept evidence in court as it risked compromising security operations.
Mr Howard challenged him to examine the Tory proposals carefully "before taking any further steps along what, I really believe, is a dangerous path for the Government to follow". Mr Blair responded: "Yes, of course we will. It's important we look at proposals from any quarter."
Talks between the two leaders would be the first formal meeting they have held since Mr Howard became Tory leader.
Later, Downing Street insisted it stood by the thrust of the plans, but hinted that judges could be given greater authority to review "control orders".
The Liberal Democrats confirmed yesterday that they would oppose the "wholly unacceptable" plans for house detention, which they condemned as an attack on cherished civil liberties. They are also calling for intercept communications to be allowed in the prosecution of terrorist suspects, with security-cleared judges considering the evidence against them.
Two former ministers joined the growing Labour rebellion. Frank Dobson, the former health secretary, said he "could not possibly support" such restrictions on British citizens, while Michael Meacher, the former environment minister, said: "I don't think it's necessary in terms of national security."
Shami Chakrabarti, the director of Liberty said: "It is important that the defence of democratic values is moving beyond the courtroom into political and public debate. Both national security and human rights are best served by bringing suspects to trial. This should be the focus of any new policy which must include use of intercepted telephone calls."Reuse content