MI5 has made it clear to the Home Secretary that it is not opposed to having transcripts of phone interceptions made available to courts, although major concerns remain.

GCHQ, the government signals intelligence centre in Cheltenham has also indicated that it is not against having intercepted material revealed in court.

The backing of MI5 and GCHQ would clear the way for Charles Clarke’s proposed counter-terrorism laws to include approval for intercepted material in terrorist trials.

The possibility of using telephone-intercept transcripts has been considered by the Home Office for some time, but the reservations of MI5 and the other secret agencies have acted as a brake on Mr Clarke’s plans.

Security sources insisted, however, that MI5 had never opposed legislation on intercept material but had merely emphasised that there was a fine balance between the advantages of having such evidence in court and the dis- advantages of revealing its technological capabilities.

GCHQ has similar reservations, fearing that intercepted evidence might jeopardise sources and methods.

Both organisations are also worried about the huge administrative task of transcribing thousands of pages of intercepted phone conversations over the period of an investigation, which could be a year or more.

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