MI5 is to recruit 1,000 extra spies to bolster Britain??s defences against the growing threat of Islamic terrorism.

The move, to be announced this week by David Blunkett, the home secretary, will boost the agency??s staff to 3,000. They will be deployed to improve the surveillance of terrorist suspects and the protection of high-profile targets.

Security officials believe that cells of Islamic militants are still operating in Britain. Last November Eliza Manningham-Buller, the director-general of MI5, warned Blunkett that her agency did not have the resources to cope with the existing terrorist threat.

The expansion of MI5, disclosed by a senior home office official, will be announced in the Commons on Wednesday. Blunkett will say Britain remains in a state of national emergency because of the continued threat from suicide terrorists working under Al-Qaeda.

Although MI5??s budget remains secret, it is thought to have accounted for some ??200m of the estimated ??1 billion spent on the three main intelligence agencies last year. The lion??s share goes to GCHQ, the government??s eavesdropping centre in Cheltenham, with about ??250m for MI6, the overseas intelligence service.

Nearly 60% of MI5??s budget is devoted to counterterrorism. The rest is dedicated to monitoring spies from hostile intelligence agencies and to countering nuclear, chemical and biological proliferation.

Many of the new staff will work for A4, the surveillance section dubbed as ??the lamplighters?? in John le Carr????s novels. They specialise in following and watching terrorist suspects 24 hours a day.

Other recruits will become analysts in G branch, the international terrorist section dealing with Islamic suspects. There will be huge increases in A branch with the recruitment of dozens of linguists who speak Arabic, French and Farsi.

Dozens more officers will be drafted into T branch, responsible for protective security, which also helps to improve protection for possible Al-Qaeda targets such as the Queen.

??This new money marks a step change in our capacity to undertake resource-intensive investigations,?? said one official.

This week the Home Office will outline possible new laws on terrorism. These include allowing some trials of terrorist suspects in secret, lowering the burden of proof required to convict a terrorist and letting evidence from phone-tapping be used in court.

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