GORDON BROWN was asked last night to explain how Abu Hamza al-Masri, the militant cleric, managed to buy a £220,000 house in London while being held in a top-security prison.

MPs want to discover how the Islamist extremist was able to pay cash for the four-bedroom property in northwest London when both the Treasury and the United Nations had frozen his assets because of his terrorist links.

Abu Hamza bought the semi-detached house in Greenford in October 2004 while he was amassing a legal aid bill that will cost taxpayers more than £250,000. The disclosure is embarrassing for the Chancellor, 24 hours after Mr Brown announced that he was introducing even stricter safeguards to police the financing of terrorism suspects and militant groups.

Patrick Mercer, the Tory homeland security spokesman, said: “This is outrageous and makes an utter mockery of how the Chancellor has slipped up in dealing with terrorist financing.”

In May 2001, the UN placed the former imam of Finsbury Park mosque on the list of suspects allegedly associated with the Taleban and al-Qaeda. In April 2002, the Treasury ordered that his assets be frozen. The cleric’s benefit payments were stopped when he was arrested in May 2004. Yet, two days before he was charged for inciting murder and racial hatred in October 2004, he reportedly bought the house in Hicks Road, Greenford, while being held at Belmarsh top-security prison. Government lawyers have already begun moves to seize the property.

George Osborne, the Shadow Chancellor, demanded that Mr Brown explain how the cleric had apparently managed to make a mockery of Britain’s supposed tough counter-terrorism laws. “If Abu Hamza bought a property while in prison, this will raise serious questions about the Government’s promise to clamp down on the financing of terror,” he said. Abu Hamza was found guilty of incitement to murder and racial hatred at his Old Bailey trial in February and jailed for seven years. He is seeking further legal aid for an appeal.

The purchase was uncovered by investigators working for the Legal Services Commission, the body in charge of the £2 billion legal aid budget. They reportedly discovered a financial trail linking the sale of another London property, in Adie Road, Hammersmith, to the purchase of the house in Greenford.

Abu Hamza bought the flat in Hammersmith from the local authority under the right-to-buy scheme for £100,000 in 1999 and sold it for £228,000 a month before he bought a much bigger property in Greenford.

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