The world is living in “remission”, waiting for the next 9/11 terrorist attack, a report by the Royal United Services Institute said yesterday.

The next attack could deliver an “even greater psychological blow”, and Britain was in a poor state to deal with any new threat, the institute said.

The country was now suffering from a sense of national “fragmentation”, faced by the “implacability” of the Islamic terrorists threatening Britain from within and without.

The Whitehall-based Royal United Services Institute (RUSI), urged ministers to restore defence and security as the first duty of government, and emphasised that the failure to “lay down the line” to immigrant communities had undermined the fight against extremism.

Britain, the report said, had become “a soft touch” in the face of mounting security threats at home and abroad.

The RUSI report was written by Professor Gwyn Prins of the London School of Economics, and the Marquess of Salisbury, the former Conservative leader in the House of Lords, who had consultations and discussions with a group of senior figures, including Field Marshal Lord Inge, former Chief of Defence Staff, General Sir Rupert Smith, former Deputy Supreme Allied Commander Europe, and Professor Hew Strachan, a leading historian.

They called for the establishment of a new powerful Cabinet committee, consisting of senior ministers, defence chiefs and officials, to coordinate security policy across the full spectrum of government activity.

The committee should be supported by a second joint committee of both Houses of Parliament which would be responsible for identifying gaps in capability and to build consensus on security and defence issues.

The RUSI report is published in advance of the expected national security strategy document currently being drawn up by the Cabinet Office.

“The United Kingdom presents itself as a target, as a fragmenting, post-Christian society, increasingly divided about interpretations of its history, about its national aims, its values and in its political identity,” the RUSI report said. There had also been a misplaced deference to multi-culturalism.

“The country’s lack of self-confidence is in stark contrast to the implacability of its Islamist terrorist enemy,” the report added.

The authors of the report accused successive governments of presiding over a decline in the Armed Forces which seemed to be engulfed in an “atmosphere of chronic disrepair”.

Politicians, in particular, appeared to have suffered from “sea blindness”, which had resulted in a rapid shrinking of the Royal Navy, despite Britain’s continuing dependence on sea traffic for its existence.

The United Nations, Nato and the European Union had also all lost their way, the report said.

Baroness Neville-Jones, the Shadow Security Minister and a former chairman of the Joint Intelligence Committee, said the report sent a powerful message to the Government that leadership was “badly lacking at a time of significant threat to our country”.

She said multi-culturalism had been “a disaster for national cohesion” and had increased Britain’s vulnerability to terrorism.

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