Scotland Yard’s anti-terror unit has been stripped of its control over covert surveillance teams in an attempt to ward off further criticism over the shooting of Jean Charles de Menezes, The Times has learnt.

Sir Ian Blair, the Metropolitan Police Commissioner, ordered the overhaul of undercover policing, despite stiff opposition from inside the force. Senior sources are concerned that the loss of dedicated counter-terrorism surveillance units, which can be deployed anywhere in the country, might undermine future security operations.

The force was criticised heavily for the failure of its surveillance teams to identify Mr de Menezes, 27, as a civilian on July 22, 2005. Firearms officers shot him dead at Stockwell Tube station, South London, in the belief that he was a suicide bomber.

Surveillance officers from Special Branch, now part of Counter Terrorism Command, had followed him from a block of flats linked to Hussain Osman, one of four men who had tried to detonate explosives on the Underground the previous day.

The officer who saw Mr de Menezes leave the building was urinating into a plastic container at the time and unable to photograph or film him.

Other surveillance officers followed Mr de Menezes on foot and on two buses but were never able to identify him, although some said that he resembled Osman. However, commanders at Scotland Yard became convinced that Mr de Menezes was Osman and gave the order to stop him. Officers shot Mr de Menezes in the head seven times from close range.

The Independent Police Complaints Commission demanded a policy review on joint surveillance and firearms operations. Last year at a trial for breaches of health and safety laws, prosecutors told the Metropolitan Police that “a properly executed strategy would not have led to the mis-identification of Jean Charles de Menezes and his shooting”.

The force is braced for further disclosures about the operation when an inquest is held for Mr de Menezes in September.

The Times understands that Sir Ian, who denied weekend reports that he had recent discussions about extending his contract as commissioner, was determined to push through the reform of surveillance operations before the inquest.

All surveillance teams, covering terror and criminal activity, will fall under the covert policing command within the Specialist Crime Directorate.

Counter-terrorism sources told The Times that they were alarmed by the decision. They argued that anti-terrorist surveillance was different from other types of covert police work, often requiring many months of observation, sometimes with the aim of disrupting the activity of terror cells rather than making arrests.

The work some teams have carried out, in photographing and filming suspects, has proved vital at recent terrorism trials. The units also play an intelligence-gathering role, watching the activities of extremists suspected of involvement in terrorist recruiting.

One source said: “It’s not the same as watching some guys planning a bank robbery – it’s more long term.”

It is believed that the decision to unify surveillance units has also caused unease in the intelligence services and military intelligence, both of which work closely with Counter Terrorism Command’s surveillance teams.

A spokesman for Scotland Yard insisted that the changes would not affect counter-terrorism operations and had been agreed jointly by the management board of senior officers and staff.

“The Metropolitan Police Service is continuously looking at ways to improve its covert policing capability,” the spokesman said. “We will be enhancing our surveillance response through the coordinated management and deployment of these teams by the Covert Policing Command. These structural changes will improve operational response, health and safety, and broaden expertise. There will be no reduction in capability of dedicated surveillance teams available for counter-terrorism. This change is designed to improve our operational response to such matters.”

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