The Home Office confirmed yesterday that it was at an early stage of examining whether to introduce new legislation to outlaw dissidents conspiring to commit crimes in other countries.
The move follows growing concern that London is being used as a base by extremists to plot or finance terrorist attacks.
The powers could be used to silence people such as the Saudi dissident Mohamed al-Masari who has waged a campaign by fax machine from Britain for the violent overthrow of the Saudi royal family.
Israel has also complained to Britain that radical Arab groups such as Hamas and Islamic Jihad are using London as a conduit for funds.
Jack Straw, the Home Secretary, said in a letter to the Board of Jewish Deputies that Labour was "carefully considering the question of introducing legislation that would give the courts jurisdiction over acts of conspiracy performed in this country in respect of criminal acts abroad".
A private member's Bill by the Tory MP Nigel Waterson during the last Parliament had a similar objective but failed because there was no quorum in the Commons. This led to a slanging match between the parties, each blaming the other for the break down.
Mr Masari successfully fought an attempt last year by Michael Howard, the then Tory Home Secretary, to have him deported to the Caribbean island of Dominica.
Mr Howard was forced to make a U-turn after a High Court ruling that he had circumvented the UN Convention on Refugees for "diplomatic and trade reasons". His presence in Britain was an embarrassment for the Tory Government. It had been keen to maintain friendly relations with the Saudis in order to preserve pounds 20bn of arms sales and protect jobs.Reuse content