Terror suspects who provide useful information to the security services could receive lighter sentences under a new "supergrass" plan.
The proposal emerged tonight after Charles Clarke, the Home Secretary, unveiled a draft Terrorism Bill which was drawn up in the wake of the London bombings.
The centrepiece of the Bill is a proposal to give police the power to hold terror suspects for up to three months without charge even though Mr Clarke has misgivings that the period is too long.
The Bill also contains new laws to prosecute extremist Islamic bookshops by creating a new offence of "dissemination of terrorist publications" plus a proposed new offence of glorifying terrorism, carrying up to five years in jail.
It will not be a crime to glorify any events which happened more than 20 years earlier, except those contained in a list drawn up by the Home Secretary. The offence would apply to terror attacks around the world not just those on British soil.
A Home Office spokeswoman said: "These events which are still felt to be ‘raw’ will be contained in an order attached to the Bill.
"For example, in 20 years’ time people might still feel that September 11 or July 7 were events that still ought not to be glorified.
"Some examples which have been put forward of events which might not qualify for inclusion in the list are the Easter Uprising or the French Revolution."
In the days after the London bombings, Britain's police and security forces asked to be able to hold terrorism suspects for longer than the 14 days currently allowed under the law before charging them with a crime.
Today's proposals show that Mr Clarke intends to grant the police a radical extension of their powers. Police will be able to hold suspects for three months without charge, renewing the detention every week.
The Home Office says that the police need to be able to hold terrorism suspects for longer while investigators examine CCTV footage, encrypted electronic evidence and international terror networks.
But it emerged tonight that Mr Clarke himself is uncertain about the three month detention period. In a paragraph deleted from a letter he wrote accompanying the proposal, the Home Secretary admitted that there was room for debate on the subject:
"I think the case for some extension is clear though I believe there is room for debate as to whether we should go as far as three months and I am still in discussion with the police on this point," said the original draft of the letter, according to London's Evening Standard.
The supergrass plan was contained in a letter from Mr Clarke to opposition parties. Evidence from the proposed intelligence interviews could not be used against the person supplying it, but police and security services could glean valuable details about other terror suspects, and possibly prevent future attacks.
In return, the informant could expect a shorter sentence because the judge would be told about their co-operation, legal sources said.
Mr Clarke said in his letter: "Our preliminary legal advice is that such intelligence interviews would be legal but further work will be needed, including drawing up necessary codes of practice, before any such interviews could take place."
Senior legal sources told the Press Association that the interviews would be secret, would not be tape recorded and need not be carried out in front of the suspect’s lawyers.
Today’s plans immediately drew criticism from the Liberal Democrats, a Muslim group and civil liberties campaigners.
Shami Chakrabarti, the Liberty director, said: "Glorification is so broad that the Home Secretary will take powers to determine which historical figures were terrorists and which freedom fighters."
The Bill would "make loose talk a serious criminal offence", she added.
Mark Oaten, the Liberal Democrat home affairs spokesman, said that the glorification offence and detention powers would require a "major rethink" to retain his party’s support.
"Creating an offence of glorifying terrorism is unlikely to work in court and could be open to too wide an interpretation.
"And the proposal for holding suspects for up to three months is totally unacceptable," he said.
Massoud Shadjareh, the chairman of the Islamic Human Rights Commission, said: "These measures, coupled with faulty British intelligence, will increase the witch-hunt against Muslims similar to that conducted against the Irish community.
"If criminalisation of glorification is the way forward, why don’t we have legislation against the glorification of drug use and gangsterism which kills many more people than terrorism?"
David Davis, the Shadow Home Secretary, generally welcomed the package but said a convincing case for extended detention periods had not yet been made.
The draft Bill contained a number of other new powers already discussed by the Government including "preparation of terrorist acts", carrying up to life imprisonment, and "encouraging terrorism" by indirect incitement, carrying up to seven years.
Providing or undertaking any kind of terrorism training will also become a specific offence, with a maximum term of 10 years in jail. The new offence of disseminating terrorist publications would cover anyone who "gives, sells or lends" such material whether on paper or online, carrying up to seven years’ imprisonment.
Those laws broadly match proposals made by the Home Secretary on July 18 after the three main parties agreed to accelerate the Counter-Terrorism Bill in the days after the London bombings. The Bill was originally intended to come before Parliament next spring.
The clauses demonstrate the Government intends to continue its plan to criminalise the glorification of terrorism, a statute that legal experts have warned will be difficult to prove in court.
Hours before the legislation was published, seven men were detained in London and Manchester in a co-ordinated series of raids carried out under long-standing powers to deport foreign terrorist suspects considered a threat to national security.
Sources indicated that some of the detainees were among the eight co-defendants acquitted in the Ricin trial at the Old Bailey in April.
