Police chiefs are divided over proposals to create a national director who would take charge of all investigations into terrorism.

Some chief constables are alarmed at the prospect of Scotland Yard taking control of their officers. But other senior officers want to set up a national counter-terrorism squad dubbed “MI8”.

John Reid, the Home Secretary, is also facing bitter opposition from three government departments over his proposal to take over as a new-style Secretary of State for National Security, in overall charge of counter-terrorism strategy.

Mr Reid’s proposals have been with Tony Blair for several weeks. Whitehall sources said that the question of Mr Reid taking over the new national security role was still “up in the air”. Opposition is said to be coming from within the Foreign and Commonwealth Office, the Cabinet Office and the Treasury.

A debate about how to run Britain’s police defences against terrorism has been raging for more than a year. The new row has come to the boil with a document calling for reforms and the setting up of three regional police “hubs” that would deal with local counter-terrorism work.

At a national level, Peter Clarke, the deputy assistant commissioner in charge of Scotland Yard’s antiterrorism branch, is the national co-ordinator. But Mr Clarke can only advise and coordinate. He cannot take over an investigation.

Proposals drawn up by Ken Jones, the president of the Association of Chief Police Officers, include giving Mr Clarke the authority of the association to take command.

A national conference for all 43 chief constables across England and Wales next month will try to end divisions between the forces over how to tackle terrorism.

Yesterday Mr Jones told The Times that the counter-terrorism arrangements set up to deal with the IRA more than a decade ago were outmoded and he supported the idea of a single national commander. “We do accept that we are living in a new environment which does demand a different response,” he said.

One source said: “The whole thing has become incredibly political.”

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