Ministers were known to favour the introduction of new measures to combat the terror threat even before Thursday's bombings in London. But this week's events will have catapulted such proposals to the top of the political agenda.
Muslim leaders warned that such an offence, if mishandled, would criminalise legitimate representatives of their communities. But the new law could also be used to prosecute the authors of messages published on websites which praise the kinds of acts of terrorism that took place in London this week.
Counter-terrorism officials are taking seriously a claim by a little-known group calling itself The Secret Organization of al-Qa'ida's Jihad in Europe, that it staged the deadly attacks. In future such claims, even if they prove to be false, could fall foul of the new law.
Yesterday, the Home Secretary, Charles Clarke, was careful not to exacerbate tensions among Muslim communities. Mr Clarke had discussions with religious leaders including Sir Iqbal Sacranie, Secretary General of the Muslim Council of Britain, the Chief Rabbi, Jonathan Sacks, and Cardinal Cormac Murphy-O'Connor, the Archbishop of Westminster. Mr Clarke urged restraint. He added: "Every-body made very very powerful statements ... That the response should be to ensure those who try to destroy our multi-faith community should not be able to succeed."