Blair's plan to speed up extradition in terrorism cases is shelved

A government proposal to set a maximum time limit for future terrorism extradition cases has been dropped. The time limit was part of Tony Blair's original 12-point action plan to combat terrorism. The proposal has been shelved after consultation, the Home Office has revealed.

A working group of Home Office and Crown Prosecution Service officials will instead be set up to monitor developments and "remove obstacles to progress".

The other point already dropped by ministers since Mr Blair's announcement last August was a proposed new power for police to close mosques - something which the Muslim community had opposed.

The development came as John Reid, the Home Secretary, confirmed the official terror threat system was to be simplified from seven levels of alert to five. Under the new system, the current threat level will be "severe", meaning an attack in the UK is "highly likely".

The system, to be introduced from 1 August, will have five levels: low (attack unlikely); moderate (attack possible but unlikely); substantial (attack strong possibility); severe (attack highly likely) and critical (imminent attack expected). The simplified system eliminates the previous lowest category of "negligible".

Security sources said: "The threat level is going to stay this level for years and the only way it will be adjusted is upwards."

Current states of alert will be published on the Home Office and MI5 websites, and a new government website is also being developed to display the information.

The Home Office also published a declassified version of its counter-terrorism strategy for the first time, in which it warned that the threat from terrorism in the UK was likely to get worse in the coming years. It warned: "Overall, we judge that the scale of the threat is potentially still increasing and is not likely to diminish significantly for some years."

After widespread allegations that the war in Iraq made Britain a target for Islamic extremists and contributed towards the July 7 attacks on London, the paper said that the Foreign Office was doing more to explain foreign policy.

"This means explaining better the reasons why, for example, we supported and continue to support action in Iraq and Afghanistan," it said.

"Many disagreed with the decisions to take military action in those countries. We respect those views.

"However, the UK Government intervened because of wider issues and not because these are Muslim countries."

It provided a list of Muslim countries and territories which the UK had "helped and assisted", including Bosnia, Pakistan, Turkey and Palestine.