Security services said today that they had foiled a suspected plot to kidnap and torture a British Muslim soldier recently returned from service abroad before beheading him live on the internet.

Eight men were arrested in a series of dawn raids at 12 addresses in Birmingham. John Reid, the Home Secretary, has been informed of the arrests and is receiving regular updates about the operation.

Security sources said that the carefully planned operation had averted the alleged plan to kill the soldier, which was in its later stages.

The sources said that the alleged plotters planned to force their victim to plead for his life in online videos before torturing him and executing him much as Ken Bigley, the Liverpool hostage, was killed in Iraq in October 2004. The beheading would have been shown live on an extremist website.

The target, a man in his 20s who has not been named, is thought to have found out about the plot. He is now said to be in protective police custody. It is understood that a surveillance operation by anti-terror officers had been going on for several months.

In an unusual move, West Midlands police have called a press conference for later today to give more details about the police operation and to reassure the local communities.

A Home Office spokeswoman said: "We can confirm that a major counter terrorism operation took place earlier today led by West Midlands Police.

"The Home Secretary was fully briefed on the operation and is receiving regular updates as developments occur. This operation is a reminder of the real and serious nature of the terrorist threat we face."

Speaking outside the Home Office this morning, Mr Reid refused to make any comment on the operation, but appealed to journalists not to speculate on the nature of any plot.

A spokesman for West Midlands police said that the men were arrested on suspicion of the commission, preparation or instigation of acts of terrorism under the Terrorism Act 2000.

"The arrests were part of a counter-terrorism operation co-ordinated and lead by the Midlands Counter Terrorism Unit, supported by officers from the West Midlands Police and Metropolitan Police," a spokesman said.

"A number of addresses in Birmingham have been secured and sealed off and are currently being searched by officers from West Midlands Police and Midlands Counter Terrorism Unit.

"Whilst this operation poses no specific threat to the West Midlands, as a precautionary measure we will have an enhanced police presence at these locations.

"We would ask for the continued support and co-operation of the public. Our message to people living in the West Midlands is to remain vigilant. Public safety is our absolute priority."

Police said that 12 addresses had been secured and sealed off in the Sparkhill, Washwood Heath, Kingstanding and Edgbaston areas of Birmingham.

One of the addresses cordoned off today is an Islamic bookstore in Stratford Road, Sparkhill. The store was exposed by The Times just days after the July 7 bombings as selling incendiary works' glorifying suicide bombing and anti-Semitism. Other addresses raided included a nearby cybercafe.

A man arrested at an address in Jackson Road, Alum Rock, was named locally and is said to be 29. His brother, who did not want to be named, told reporters: "The police won’t let me know where he is. His wife and kids are very distressed. My mother and father are very distressed. The police won’t tell them where he is."

Ansar Ali Khan, a local councillor, said that he had spoken to the father of the arrested man. He said: "He was in shock to know that his son had been arrested."

He described the father as "a very hard working local businessman", adding: "He has served the community for 30 years and he is proud to be British. He cannot imagine his son having any link to this sort of activity."

A man who works in Poplar Road in Sparkhill, south-east Birmingham, where one of the raids took place, said: "I came in this morning to find police vans all over the area, the whole place is swamped with officers."

Vijay Jakkula, who lives on the same road, said that the area was predominantly Muslim. "There are quite a few mosques around here but it is a friendly area," he said.

The street is made up of largely residential terraced homes. Mr Jakkula said the majority of houses are ex-council, having been bought by the tenants.

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