Assistant Commissioner Andy Hayman, the Metropolitan Police’s anti-terror chief who receives the honour for services to the police, was also in command of a disastrous raid in East London two weeks ago in which a man was shot and injured, but later released without charge.

Muslim leaders responded with dismay, saying that the timing of the honour was insensitive, coming just two weeks after the raid.

Sher Khan, chairman of the public affairs committee of the Muslim Council of Britain, said that the Government should have been more sensitive.

“The public are going to look at this and see a man who is responsible for very terrible events being honoured at such a high level and it's going to make a lot of people not very happy.

“The Muslim Council of Britain are trying to make sure there’s good co- ordination between community and police and clearly some people feel the raid was a backward step in that.”

Asad Rehman, chairman of the anti- racist Newham Monitoring Project said that the people of Forest Gate were still waiting for a full apology from Mr Hayman, who this week said sorry for “any hurt caused”.

“Many people in London would be surprised at the timing of this honour,” said Mr Rehman. “It is rather premature, given Andy Hayman is yet to give evidence to the inquiry into the (Jean Charles) de Menezes shooting. There are also many outstanding questions on the Forest Gate raid which I hope he will answer. I think the community of East London will be very shocked when news spreads out.”

The Liberal Democrats said that although the award was planned for some time it should have been postponed. Nick Clegg, the party’s home affairs spokesman, said: “These are exceptional circumstances and there is a case for changing the timing of this honour, given the unprecedented levels of anxiety in some communities, especially in East London.”

But John Denham, Labour chairman of the Commons Home Afffairs Committee, said that the decision to give the honour could have been made many months ago and to withdraw the award would have been very difficult. “Honours at this level of policing are routine and would have been set in train many months ago.”

Several weeks ago the Independent Police Complaints Commission served a Regulation 9 notice on Mr Hayman, which is a formal warning that he is under investigation and might face a disciplinary charge. A source close to Scotland Yard said yesterday that the allegations involve a briefing to journalists on the afternoon of the shooting about the identification of the dead man and his links to terror suspects.

Mr Hayman is said to have impressed the Prime Minister with his handling of the attacks on July 7 and his performance in the Cobra committee called to deal with the emergency.

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