Bugged conversations between the radical imam and the leader of a gang that kidnapped 16 Western tourists in Yemen are banned in the British courts. Yet the same wiretap material, amassed by British Intelligence, will be central to the case against Abu Hamza if he is extradited to America, The Times has been told.

Scotland Yard and the Crown Prosecution Service faced mounting criticism yesterday for delaying action against Abu Hamza, who was jailed for seven years on Tuesday for soliciting murder and inciting racial hatred.

Last night David Blunkett, the former Home Secretary, suggested that the police, MI5 and the CPS could have acted earlier to seize the cleric. He claimed that they rejected his warnings because they feared it would trigger a race crisis.

Writing in The Sun, Mr Blunkett said: “So much for those in the security services who told me when I was Home Secretary that I was exaggerating the threat and the closure of the Finsbury Park mosque where he preached his evil message would be a ‘massive overreaction’.

“There was a deep reluctance to act on the information coming out of Abu Hamza’s own mouth. And some in the police and security services did not want to believe how serious it all was.”

Mr Blunkett is understood to have told the police, security chiefs and the CPS that they would have political backing if they raided the mosque and arrested Abu Hamza. The revelation that Britain had detailed evidence alleging Abu Hamza’s direct involvement in terrorist kidnapping and murder, but was prevented from using it, will reignite the debate on intercept evidence. The Times has also been told that Mr Blunkett argued strongly for such evidence to be used in serious cases but was again rebuffed by the security services.

Michael Howard, the former Conservative Home Secretary, also told The Times last night that he backed the use of intercept evidence.

A senior counterterrorist source told The Times that the phone taps strongly suggested that Abu Hamza was “involved in operational terrorist activity”.

But when Britain tried to move against the cleric in the spring of 1999 the case had to be abandoned because the evidence was deemed “inadmissible”. The FBI stepped in and said that if Britain could not use the material, it would.

The US indictment against Abu Hamza alleges that he bought and supplied a £2,000 satellite phone for the kidnappers and purchased £500 worth of air time for the device. It also states that Abu Hamza received telephone calls from the gang leader before and during the kidnap drama in which four hostages were shot dead. He is also charged with sending recruits to al-Qaeda camps in Afghanistan and trying to train terrorists in America.

British detectives are still investigating Abu Hamza’s alleged links with other terrorist incidents including the July 7 London bombings.

An uncle of one of the 7/7 suicide bombers blamed the cleric for brainwashing his nephew Shehzad Tanweer, 22, who visited Finsbury Park mosque.

Bashir Ahmed said: “No child could have thought of doing something like 7/7 by themselves.”

British intelligence has admitted eavesdropping on conversations between Tanweer and Mohammad Sidique Khan, the leader of the 7/7 bomb cell.

Charles Clarke, the Home Secretary, rejected any change to make intercept evidence admissible a year ago. But the Home Office said the issue was kept “under review”. Recordings of Abu Hamza’s conversations with the Yemeni kidnapper in December 1998 were made by experts from GCHQ, the intelligence listening post. They were made available to British security services and police in early 1999. At the same time a dossier on Abu Hamza was sent by the President of Yemen to Tony Blair.

Abu Hamza was arrested in March that year and questioned at Charing Cross police station about the kidnapping and killing of the hostages.

The former imam of Finsbury Park mosque admitted that he supplied the satellite phone and spoke to the hostage-taker, Abu Hassan. He told the BBC in 2002: “When they phoned they were actually phoning how to release them.”

The gang had demanded the release of ten Britons who had been arrested in Yemen on suspicion of planning terrorist attacks. The group, including Abu Hamza’s son and stepson, were sent to Yemen from Finsbury Park mosque.

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