Britain and Ireland are the only countries to ban evidence from telephone taps in court prosecutions but even Liberty, the civil liberties group, has backed its use.

Clarke, who last month said he opposed the move, is now prepared to review the ban and next week is also expected to confirm a U-turn on plans to keep terror suspects under house arrest.

The about-turn on house arrest was agreed by the cabinet on Thursday after Clarke said the police and MI5 opposed the plans, which also faced defeat in the courts and parliament.

The move follows advice from the security services, which said the house arrest plans would create a focus for disaffection with radical protesters drawn to demonstrate outside suspects’ homes. They believe the houses could become recruiting centres for Islamic fundamentalists, in the same way that internment without trial in Northern Ireland helped IRA recruitment.

While abandoning house arrest, Clarke is expected to announce that both foreign and British-born terror suspects could be subject to “control orders”, such as electronic tagging, curfews and limits on use of the internet.

Pressure on the home secretary to change his new policy — announced only last month — will continue this week when Lord Carlile of Berriew, the government’s independent adviser on terrorist legislation, will say he wants new laws to allow telephone intercept evidence to be used in court.

Eliza Manningham-Buller, the head of MI5, has told Tony Blair that, on balance, the spy agency favours the use of telephone tapping evidence. Her views, and those of senior police chiefs, such as Sir Ian Blair, the new Metropolitan police commissioner, are likely to persuade Clarke that the measure could be added as an amendment to government legislation.

This Friday Blair and Clarke will meet Michael Howard, the Tory leader, and David Davis, the shadow home secretary, at a Downing Street “terror summit” in an attempt to secure a cross-party consensus.

The Tories will say they are prepared to support the government if it drops the present house arrest proposals and promises to consider abandoning the ban on phone-tap evidence.

If there is agreement, the Tories will vote with the government to continue the temporary detention of 10 terror suspects in Belmarsh jail and Broadmoor top security hospital.

The law lords have ruled that their detention is illegal and the suspects are due to be released on March 10. o A man arrested at Heathrow on Tuesday has been charged with conspiring to cause an explosion between October 2003 and March last year. Salahuddin Amin, 29, who arrived on a flight from Pakistan, will appear before Bow Street magistrates in London tomorrow.

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