JACQUI SMITH, the home secretary, will be allowed to veto the extradition of British businessmen to America under new powers that come into force next month.

Campaigners say the new powers could help to prevent a repeat of the case of the “NatWest Three”, who were extradited to face trial in America last year.

Gordon Brown is said to be keen to alter extradition policy to provide greater safeguards for British citizens. He has received strong representations from business leaders that the law as it stands - agreed by his predecessor Tony Blair - is unfair because it allows Britons to be extradited to the United States to face trial but does not give Britain an equivalent right for American citizens to be extradited to the UK.

Such a change will be seen as an attempt by Brown to demonstrate that he is prepared to further distance himself from America in an important policy area. The US Justice Department is increasingly using the powers in the 2003 Extradition Act to crack down on alleged “white-collar crime”.

As well as the NatWest Three, future cases could include senior executives of British Airways, who are caught up in a price-fixing inquiry, and directors of BAE Systems, which has been involved in a bribery scandal.

The Home Office said this weekend that from November 8, legislation would provide Smith with the “option to enact” the new veto power.

Under the new power, Smith will be able to make an order to bar any extradition request if she decides that “a significant part” of the alleged crime has occurred in Britain. Alternatively, she could be forced to make such an order by a vote in parliament.

The Home Office said the government could not “currently envisage” any circumstances in which such an order would be made. But a source close to the issue said Brown had indicated that extradition policy would change and that in future America would have much greater difficulty in extraditing British citizens to face trial there.

Lord West, the Home Office minister in charge of security, has been given the added responsibility of dealing with extradition in advance of the changes.

The case of the NatWest Three appeared to highlight the inequities of the so-called “fast-track” policy introduced four years ago to make it easier to extradite terrorist suspects between the two countries.

The three bankers - David Bermingham, Giles Darby and Gary Mulgrew - are facing trial in Houston, Texas. They are accused of working with two US-based former executives of Enron, the collapsed energy giant, to commit fraud.

The US authorities claim their communications put the case squarely under American jurisdiction, even though the alleged activity took place in this country. British authorities decided not to press charges.

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