John Major will tell the Commons that a hand-picked group of senior MPs and peers, including former ministers, will be given the role of examining the work of MI5 and MI6, as part of his commitment to more open government.
Critics will protest that setting up a special group of Privy Councillors - who are already covered by the Privy Council oath of secrecy - falls far short of the openness which they were expecting.
But Mr Major is said by intelligence sources to have ruled out a select committee because it would not be secure. One said: 'Any kind of examination of the effectiveness and efficiency of the intelligence services has got to be done by people who are Privy Councillors who have sworn an oath and will operate within the terms of the Privy Council. Even then, you will have to be careful who you appoint.
'You can't appoint a select committee because there could be no guarantees about the secrecy.'
The oversight of the secret intelligence services will be introduced in a Secret Intelligence Services Bill, putting the MI6 on the same statutory footing as MI5, which was the subject of its own Security Service Act in 1989. It is not clear whether the group would have oversight of GCHQ, the eavesdroppers and intelligence gatherers, because of the sensitivity of its links with US agencies.
The Prime Minister's office said yesterday the SIS Bill was being prepared, but it may have to be delayed until next autumn to accommodate the lengthy passage of the Maastricht treaty Bill.
The Privy Councillors will be able to discuss operations by MI5 against the IRA. In spite of internal rivalries with the police, MI5 was given the lead co-ordinating role in the battle against terrorism under its new head, Stella Rimington.
Kenneth Clarke, the Home Secretary, told the Commons Home Affairs Select Committee this week that it could meet Mrs Rimington. No date has been fixed, but committee members intend to put the present mainland bombing campaign by the IRA on the agenda.
One senior Conservative backbencher firmly denied yesterday that there were any Tory rumblings over the failure of the MI5- led operation to prevent the spate of recent bombings.
'On the contrary, it seems pretty effective, because the IRA have had to choose soft targets outside central London,' he said.
In a separate move, a Bill on freedom of information is to be introduced with a national campaign by Mark Fisher, Labour's spokesman on the Citizen's Charter and open government.
The Bill, due for a Second Reading on 9 February, would create a right of access to official records held by public authorities; reform the Official Secrets Act 1989 by providing a public interest defence for disclosure of information; create a right of access to employment records; and require companies to publish more information in their annual reports, including more details about pension funds.