A SUITCASE filled with bomb-making material has been found by police teams investigating the alleged plot to blow up aircraft over the Atlantic.

The suitcase, containing chemicals and other equipment for a home-made bomb, was found in woods in High Wycombe, Buckinghamshire, close to addresses at which suspects were arrested last week.

A police source said that the suitcase contained everything that would be needed to make an explosive device. This could include materials for creating an explosive, methods of concealment and a simple way of detonating the bomb. After police made arrests last week, Whitehall sources said it was feared that the explosives were to have been hidden in plastic drinks bottles and ignited using the current from an MP3 player. Details of the find have been kept secret by Scotland Yard and the suitcase is now being examined by forensic scientists and explosives experts.

A news blackout has surrounded the aftermath of the arrests last week while detectives question 23 suspects at two London police stations. The discovery was made by specialist search units, which have been scouring King’s Wood for nearly a week in search of evidence of the conspiracy. The searches are expected to continue for up to six weeks.

Police sources told The Times that the plot by Islamic extremists would have involved a version of triacetone triperoxide (TATP), which was used for the 7/7 bombings that killed 52 passengers on the London transport system last year. The plot is thought to have involved taking several liquids or a gel form of explosive on board flights with other material and then assembling a bomb in the aircraft lavatories.

Metropolitan Police officers and Treasury officials have also begun an international hunt for the money trail behind the plot. About 600 foreign banks with branches in Britain have been told to look for cash and accounts linked to the 19 names of suspects released by the Treasury last week.

The Bank of England confirmed that the note sent out on behalf of the Treasury asking financial institutions to freeze any assets owned by the suspects also applied to foreign banks operating in Britain. London is a big centre, not only for domestic banking but also for many Middle Eastern banks.

There is also a growing number of Islamic banks, which specialise in handling the financial interests of Muslims who follow the strict requirements of their religion.

The alert is the latest counter-terrorist action by the Bank, which began intervening in the banking system after 9/11 as part of a global drive to stop the al-Qaeda networks funding their operations through normal banking channels.

Pakistani investigators say they believe that a large sum of money was transferred from Pakistan to finance the terrorist plot, and a senior official told The Times that they are investigating the channels through which the funds could have been transferred.

Rashid Rauf, 25, from Birmingham, who is being held by Pakistan as a suspected key planner, is being questioned about possible terrorist financing. One channel could have been the underground system known as hawallah banking, an informal method of transferring cash, which operates by word of mouth between trusted traders.

The financial investigation unit set up within SO13, the Anti-Terrorist Branch, is likely to be looking for any links between the alleged plotters, Pakistan and the system.

Sources said yesterday that one of the arrested men had family links to the militant Islamic leader and Kashmir separatist Maulana Masood Azhar, one of India’s most wanted terrorists. Azhar family members say that the man’s sister-in-law is married to Azhar’s brother. In a further link, the father of his wife and her sister run Darul Uloom Madina, one of Pakistan’s biggest and most hardline seminaries, with some 2,000 students, in Bahawalpur, Azhar’s hometown.

Bahawalpur, an agricultural region, is a stronghold of Jaish-e-Mohammed and home to Azhar. The JeM, outlawed by President Musharraf in January 2002, had close links with al-Qaeda and the former Taleban regime. The group, which disintegrated into small cells, has been involved in most of the terrorist attacks in Pakistan since the country aligned with US war on terror.

Azhar founded the group after he was released from an Indian prison in December 1999 in exchange for 155 passengers from a hijacked Indian airliner. Ahmad Omar Saeed Sheikh, a former public schoolboy and dropout from the LSE, was also close to Jaish-e-Muhammad and is now awaiting a death sentence in Pakistan for kidnapping Daniel Pearl, the murdered American journalist.

Yesterday, as detectives continued questioning 23 suspects held in London police stations over the airline plot, Pakistani officials said that they were holding seven suspects and expect more arrests to be made in Pakistan.

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