Zambia has agreed to deport to the UK a British terror suspect whose name was circulated to foreign security services after the July 7 suicide blasts that killed 52 London commuters.

President Levy Mwanawasa said today that both Britain and the US had asked for the extradition of Haroon Rashid Aswat, a 31-year-old from Dewsbury in Yorkshire. Mr Aswat is wanted by the United States for allegedly trying to organise an al-Qaeda training camp in Oregon in 1999.

"We had discussions with the governments of the US and Britain and finally agreed that Mr Aswat should be deported to his country which is Britain," Mr Mwanawasa told reporters in Lusaka.

British officials have played down media reports that Mr Aswat, who was arrested in Lusaka on July 21, helped organise the 7/7 attacks. He reportedly had mobile phone contact with at least one of the bombers before the attacks.

Mr Aswat's movements before the attacks are also unclear. He is believed to have spent time in South Africa and Botswana before entering Zambia.

Reports that he spent two weeks in Britain before the first London bombings and left only hours before the four suicide bombers blew themselves up have not been confirmed. On that trip, he was alleged to have visited Leeds, where three of the bombers lived.

Mr Aswat, who is of Indian origin, is thought to have been involved in radical Islam for about ten years and was an aide at the Finsbury Park mosque, whose website he is said to have run in the 1990s.

Zambian officials have said that Mr Aswat co-operated with his interrogators in Lusaka and told them that he had once served as a bodyguard to Osama bin Laden, the al-Qaeda leader. If that claim is verified, it would make him the most prominent Briton in the terror network.

The Johannesburg-based daily, The Star, reported this week that Mr Aswat was known in South Africa as a flea-market salesman who made his living selling Islamic CDs and DVDs.

He was apparently well-known in Johannesburg’s Fordsburg district, one of the city’s main Muslim suburbs dotted with street-side material shops and one of the best-known fleamarkets, the Oriental Plaza.

Scotland Yard was waiting today to hear the date of the first hearing on its request for the extradition of Osman Hussain, one of the four men alleged to have tried to set off bombs in London on July 21. Mr Hussain was arrested in Rome last Friday and Britain wants his extradition fast-tracked under the new European arrest warrant.

Richard Owen, Rome Correspondent of The Times, said the first hearing was not expected to be held until the end of August or beginning of September.

Sixteen other people are being held in the UK in connection with the attempted attacks of July 21, including the three other alleged bombers. The first of the alleged bombers to be arrested, Yasin Hassan Omar, can only be held for two more days without charge.

Separately, it emerged today that the families of the 52 victimes killed the July 7 bomb attacks will be eligible for just £11,000 each under a Government-funded compensation scheme. They will be entitled to that amount if they apply to the Criminal Injuries Compensation Scheme which pays out to victims of crime.

That figure compares with around $2 million (£1.13 million) for each death claim made by families of September 11 victims to the US Government.

If more than one family member of a July 7 victim applies for compensation they will only get £5,500 each. They will also be entitled to "reasonable" extra payments to cover funeral costs. Dependent children are entitled to £2,000 a year until they turn 18.

Under the scheme, a maximum figure of £500,000 can be paid to survivors who are seriously debilitated and claim for loss of earnings and care costs as well as compensation.

Survivor Davinia Turrell, who became known to millions across the world as "the woman in the mask" when she was photographed after the bombings, could be eligible for up to £27,000 as a burns victim should she choose to apply.

But the scheme has strict guidelines under which the families of deceased victims receive only a fraction of the maximum payouts. The scheme has existed since 1964 and is run in England, Scotland and Wales by the Criminal Injuries Compensation Authority and funded by the Home Office.

Supporters of the scheme argue that the sum given to victims’ families should not be seen as the value of a life but as a "token of public sympathy". The Home Office pays out more than £200 million a year under the scheme to thousands of crime victims and says it is one of the "most generous" such systems in the world.

But it has faced criticism in the past from some families, including one relative of murdered schoolboy Damilola Taylor who called the compensation available "an insult".

Victims’ groups have also condemned the level of compensation for families as "a pittance". A spokesman for the Victims of Crime Trust said: "Families should be given probably 100 times as much because, let’s face it, they have to live with this tragedy for the entirety of their lives. It has to be more than £11,000.

"This is only supposed to be a token but it should be more than a token. Murder destroys far more than just the victim’s life, it destroys the lives of families and communities, and it’s about time the Government raised its level of payments to victims’ families."

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