Armed police in Pakistan arrested 24 men last night in a series of overnight raids aimed at extremists in Lahore and Karachi, including several with alleged links to the bombings in London on July 7.

But there was confusion today over whether a British man regarded as a key suspect in the attacks was among them.

Last night Pakistani security sources told The Times that two or three of the men were thought to have links to the London bombings but one in particular was "a major figure in al-Qaeda".

Today the Pakistani Information Minister, Sheikh Rashid Ahmed, denied reports that the man was Haroun Rashid Aswad, a British-born man of Indian descent who British authorities are seeking as a possible ringleader in the attacks.

"We have arrested nobody called Haroun Rashid," the minister told the Reuters news agency.

The minister's denial came after several unnamed Pakistani security sources said that Mr Aswad was in custody after being picked up either last night or in one of the many police raids that have swept through the homes and schools of extremists in Pakistan this week.

One source told Reuters that Mr Aswad was arrested at the house of a qari, the honorific title given to Islamic scholars who have memorised the Koran, in Sargodha, a town 150 km (90 miles) south of Islamabad.

"We have arrested Haroun Rashid from the house of Qari Fateh Mohammad from Sargodha three days ago... We strongly believe he has links with bombers," the official said.

The official added that Mr Aswad had been taken from Sargodha and was being held in Lahore, the capital of Punjab province.

British authorities have reportedly wanted to question Mr Aswad, who appears in US databases of terrorist suspects, ever since his name cropped up in the telephone records of some of the London bombers.

The Agence France Presse news agency reported yesterday that relatives of Mr Aswad had been questioned in Lahore over the nature of their recent contact with him.

"We questioned the family in Lahore and have found that the calls were about business matters," a security official told AFP.

"Haroun Rashid appears to be a key suspect for the British police in connection with the London bombing, but we do not have specific information on his suspected role in the July 7 bombings," the official said.

Last night's raids in Pakistan were part of a broader campaign ordered by President Pervez Musharraf to gain control over religious schools and fundamentalist Islamic groups in the country.

Around 150 students and clerics have been arrested in the last week in sweeps at schools, known as madrasas, and private houses throughout Lahore, Karachi and a number of cities in Pakistan's Punjab province.

General Musharraf is expected to address the nation tomorrow to explain the recent raids and his concern at the apparent links between Pakistani militants and the July 7 bombings. This week, Pakistani authorities confirmed that three of the four bombers who killed 56 people in London visited Pakistan in the last year.

The arrests came as a leaked secret report revealed that intelligence chiefs believed three weeks before the London bombings that there were no known terrorist groups with "the current intent and the capability to attack Britain". The reassurance delivered by the Joint Terrorism Analysis Centre (JTAC), based at MI5, led to the lowering of the alert state from "severe general" to "substantial".

The leaking of the JTAC conclusion to The New York Times placed the Government and its intelligence advisers in an embarrassing position. Charles Clarke, the Home Secretary, has already said in public that the decision to lower the terrorist threat alert was wrong.

The JTAC report also contradicted the Government’s political stance, repeated vociferously this week, that the events in Iraq had no bearing on the terrorist attacks in Britain. "Events in Iraq are continuing to act as motivation and a focus of a range of terrorist-related activity in the UK," it said.

Security sources said that the threat analysis was based on the available intelligence at the time. "This was an intelligence gap, not an intelligence failure," one source said.

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