MI5 is to be criticised by a parliamentary committee for its decision to call off a surveillance operation on a British terrorist suspect who later became the leader of the July 7 suicide bombers.

The matter will be raised in a special report by the cross-party Intelligence and Security Committee.

The committee, which is chaired by Paul Murphy, the former Northern Ireland Secretary, and consists of eight MPs and one member of the House of Lords, has been investigating all the secret material relevant to the period leading up the July 7 bombings, which killed 52 people in London last year. Its report is due next month, but some details were leaked to the BBC yesterday.

The committee is not expected to blame any of the secret agencies for the failure to stop the suicide bombings. But it is understood to have underlined the intelligence gaps relating to Mohammad Sidique Khan, the Leeds-born primary school teaching assistant who was the ringleader of the four bombers.

Khan had come to MI5’s notice more than a year before the bombings, when he was spotted with other terrorist suspects. He was subjected to surveillance for a brief period but was not regarded as a significant player. At that stage he was not even identified but was just a blurred image on a surveillance tape. There were dozens of other potential suspects caught up in the same surveillance operation, but with a limited number of MI5 “watchers” available, the Security Service counter-terrorist branch decided to focus its efforts on the most serious “targets”. Those assessed to be on the periphery, such as Khan, were left alone.

MI5 is known to have told the committee that it identified the suspect on the earlier surveillance tapes only after the July 7 attacks.

According to the leaks on the BBC Radio Today programme, the committee asks in its report why Khan was not properly investigated, indicating that perhaps more was known about him in the lead-up to July 7 than has so far emerged in the public domain.

The committee is also said to be critical of the lack of intelligence-gathering against known British Islamic militants visiting Pakistan before the July 7 attacks. Both Khan and Shehzad Tanweer, another of the bombers, had visited known militants in Pakistan.

The committee, which operates in a “ring of secrecy”, has questioned all the key players during its investigation. Eliza Manningham-Buller, the head of MI5, has given evidence, as have her most senior directors involved in counter-terrorism.

The committee, which will present its report to Tony Blair on his return from his trip abroad, is said to have recommended changes to the threat-alert definitions. The current definitions — “critical, severe (defined), severe (general), substantial, moderate, low, negligible” — were devised after the Bali bomb in 2002. A month before the July 7 bombings, the threat level was reduced from “severe general” to “substantial”.

Patrick Mercer, Conservative homeland security spokesman, said that whatever the committee recommended, it was still important for there to be a full independent (not public) inquiry. He said: “We want to know why the decision was made to lower the threat level. We’re not looking to apportion blame but lessons need to be learnt and we need to know whether the Government is providing enough resources to the intelligence services.”

• 'I am British by definition — the adjective referring to Britain, or its inhabitants or citizens. And I am a Muslim, but no, I'm not a terrorist'

  A 7/7 survivor reflects on what it means to be a British muslim. Read the full article at www.timesonline.co.uk/comment

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