Gordon Brown has signalled higher spending to counter terrorism, and told cabinet ministers to give greater priority to tackling the threat by "winning hearts and minds".
In another sign that his writ is running way beyond his Treasury brief, the clear front-runner to succeed Tony Blair next year promised to put security at the heart of the government-wide spending review to be concluded next summer.
The Chancellor, who has doubled the anti-terrorism budget to £2bn a year since the 9/11 attacks, plans a further significant increase for the police and security services next year, even though the spending round will be tight. He hopes to outflank the Tories at a time when Labour is seeking to portray David Cameron as "soft" for opposing some of the Government's law and order measures.
Mr Brown looks certain to create a single security budget by pooling the spending of MI5, MI6, GCHQ, the police's anti-terrorism work, and relevant spending by the departments responsible for transport, communities, local government and culture. He believes that this will ensure a more focused and co-ordinated approach to an issue to which some departments do not give enough priority.
Allies said Mr Brown wanted to use the spending review to "bang heads together" and was concerned that departments not in the front line of the war on terror were not doing enough to win "hearts and minds" in the wake of the 7/7 attacks in London. He wants them to play a bigger role in winning the argument about the values that underpin British society.
He has spelt out his plans for a more strategic approach to planning and sharing out resources in a letter to cabinet colleagues, and is working closely on it with John Reid, the Home Secretary.
In a written Commons statement, the Chancellor said: "It is already clear from the work under way that we face a new type of threat which erodes traditional distinctions between homeland and international security, and between those traditionally tasked with security policy and other areas of government. No department of government can any longer simply leave security to others."
He said that the spending review would "ensure that by working beyond departmental boundaries we can enhance the effectiveness of our structures for protecting Britain's security, and set out the part each department can play." Mr Brown said the review would also consider how to harness new technology to prevent terrorists and criminals using multiple identities to escape the law and bypass border security.
George Osborne, the shadow Chancellor, said a single security budget would be sensible, but challenged Mr Brown to go further by creating an US-style homeland security department, headed by a cabinet minister. He said that the Chancellor should scrap his "short-sighted" decision to pre-empt the review by freezing the Home Office's budget. "Gordon Brown should admit his mistake and reopen the Home Office budget settlement as part of the broader review of security spending," he said.