In a break with tradition, Dame Eliza Manningham-Buller, Director-General of MI5, allowed a confidential speech that she had given to Dutch intelligence officers to be published on the agency’s website yesterday. She gave a warning that an erosion of civil liberties might be necessary to stop more British citizens from being killed by terrorists.

Her intervention will provide ammunition for the Prime Minister and Charles Clarke, the Home Secretary, in their battle with the courts over dealing with suspected terrorists. It will also bolster the Government’s struggle to introduce rules to make it easier to deport foreign preachers of hate.

The arrests of radical clerics, promised by Mr Clarke, have been delayed, and European ministers at an anti-terrorism conference in Newcastle this week frustrated his plan to store mobile phone records for a year.

Dame Eliza does not specify which human rights need to be compromised to help the intelligence agencies and police to cope with the threat of attacks, but her intervention is certain to intensify the debate among MPs and human rights groups.

Dame Eliza insisted that MI5 would not be “coerced” into sharing intelligence with friendly agencies.

Mr Clarke faced strong opposition to his call for tougher counter-terrorism laws after the July 7 and July 21 attacks in London, when he addressed the European Parliament in Strasbourg this week.

Dame Eliza, speaking in The Hague on September 1 at a meeting to mark the 60th anniversary of the founding of the Dutch General Intelligence and Security Service, made it clear that she had serious concerns about trying to counter the terrorist threat without greater powers, even if that meant encroaching on human rights.

Echoing words used by the Prime Minister, Dame Eliza said: “The world has changed and there needs to be a debate on whether some erosion of what we all value may be necessary to improve the chances of our citizens not being blown apart as they go about their daily lives.”

She admitted that the July attacks in London had been “a shock” to MI5 and to the police, but said that intelligence was always going to be fragmentary and incomplete.

She praised the response of the public to the bombings and people’s refusal to be cowed. Most people, she said, understood that the attacks were “on all our citizens, whatever the ethnic origins”.

The central dilemma for MI5 and other agencies, and for the Government, was trying to protect British citizens “within the rule of law when intelligence does not amount to clear-cut evidence and when it’s fragile”.

Dame Eliza said that she wished to do nothing that would damage “hard-fought-for [human] rights”. But trying to contain terrorism in a democratic society was “not straightforward”.

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