Security services 'ruled out terror threat three weeks before attack'

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The Independent Online

The Independent has learnt that the Intelligence and Security Committee, chaired by the former cabinet minister Paul Murphy, will check reports that MI5 failed to track one of the four suicide bombers because he was judged not to be a threat. It will also question intelligence chiefs about the lessons to be learnt. The cross-party committee is expected to hear evidence from Eliza Manningham-Buller, director general of MI5, and John Scarlett, head of MI6, the Secret Intelligence Service.

They want to know whether the failure to track Mohammad Sidique Khan, who blew himself up at Edgware Road Tube station, was due to a shortage of manpower or an intelligence blunder.

Concerns that the intelligence services had failed were heightened yesterday by new evidence that they had underestimated the threat from Muslim extremists. A British intelligence report leaked to The New York Times revealed that the security services in London had concluded three weeks before the bombings that there was no group with the intent or capacity to attack the UK.

Tony Blair insisted in the aftermath of the bombings two weeks ago that it was wrong to pursue the "blame game" over failures in intelligence.

Tomorrow the Prime Minister will meet police and intelligence chiefs to decide with Mr Scarlett and Ms Manningham-Buller whether they need more resources. Gordon Brown, the Chancellor, announced in his 2004 Budget that the Government was expanding the intelligence and security agencies by 1,000 staff and overall security spending would rise from £950m in 2001 to £2.1bn by 2007-08, - an average rise of 10 per cent a year in real terms.

In its investigation, the Intelligence and Security Committee will ask whether a lack of resources allowed the terrorists to strike, even though some of the gang were "on the radar" of the intelligence services.

Khan, 30, was the subject of a threat assessment by MI5 officers after he was found to be an associate of a suspect in an investigation in 2004 into an alleged plot to build a lorry bomb in Britain. He was not considered to be a terrorist risk. It has emerged that Khan and a second bomber, Shahzad Tanweer, 22, had visited Pakistan but MI5 failed to pick them up.

Khan, a well-respected teaching assistant who had visited the House of Commons, is believed to have been a senior member of the terrorist gang. He used a gymnasium in Beeston, Leeds, to recruit disaffected Muslim youths.

The assessment of the terror threat, by the Joint Intelligence Assessment Centre in London, caused the intelligence alert in the capital to be lowered from "severe defined" to "substantial" in the UK.

The report also directly linked terrorist-related activity in Britain with the continuing violence in Iraq.

There were immediate fears in Whitehall that the leak in the US was part of long-running rivalries which have caused distrust between the CIA and MI6.

But although the leaked report said there was no sign of an imminent attack, it outlined a two-pronged threat facing the country: from the international al-Qa-ida network, and indigenous radicals.

It also concluded with a warning that lone extremists or small groups could attempt lower-level attacks. One senior British official was quoted as saying there was a sharp disagreement among officials about whether the intelligence justified lowering the threat level. "There was not an easy consensus," he said.

Yesterday, the Home Secretary, Charles Clarke, discussed tougher EU measures against terrorism with the European commissioner for justice and home affairs, Franco Frattini, in London. They include tighter controls on access to explosives and more effective surveillance and pursuit of suspects across borders.

The Home Office said it will consider moves to allow police to pursue suspects across territorial waters or airspace. Meanwhile Britain threw its weight behind other ideas put forward by Mr Frattini who wants to toughen restrictions on the sale of fertilisers which could be used for bombs and to create a network of EU bomb disposal squads. His plans would mean comprehensive reporting of suspicious transactions of commercial explosives, better security for transporting them and a new system to trace their movements.