THE Chancellor paraded his credentials to take charge of the nation’s security yesterday as he called on America and Europe to unite in a cultural war to defeat al-Qaeda terrorism in the way they had beaten Nazism and communism.

Gordon Brown, still the favourite to succeed Tony Blair, moved farther beyond his Treasury brief than ever before to lay out a comprehensive package of measures to fight fundamentalism, give his most enthusiastic backing to identity cards and signal a move to extend the detention of terrorist suspects beyond the current 28 days.

The Conservatives dismissed the speech as a “leadership bid” containing few new measures.

After lengthy consultations with John Reid, the Home Secretary, the heads of the security services and police, Mr Brown announced that the Treasury would be taking powers to use covert intelligence rather than just known information to seize the assets of terrorist groups.

He promised a big extension in the use of “forensic accounting” to identify terrorist suspects and stop the flow of money on which they relied, saying that it would be as important in detection as finger-printing in the late 19th century and DNA in the late 20th.

A new terrorism order will give the Treasury the power to stop funds reaching anyone in Britain suspected of planning terrorist attacks, but in order to increase parliamentary accountability Mr Brown promised a system under which the Treasury would have to justify its actions to a “special advocate” and report quarterly to MPs on the operation of the system.

Similarly, Mr Brown proposed increased judicial and parliamentary oversight as a way of justifying the extension of detention of terrorist suspects beyond the current 28 days. He favours the plan defeated last year to give power to hold suspects for 90 days, but he now believes that the best way to reach a higher figure is to convince MPs by consensus of the need to increase it by seven days at a time.

If Mr Brown becomes Prime Minister, he is likely to propose increasing the limit but he said that in any new legislation there should be a right of appeal to the High Court and an independent review to Parliament of cases that went beyond 28 days. “Today we face terrorists who act without warning, who can take the lives of thousands in one act and who are willing not only to take the lives of others, but their own as well,” he said. “So we cannot now risk waiting for someone to commit an act. It would be a failure of our duty to protect people to do so.”

Mr Brown had three conversations with Mr Reid about the contents of a speech that strayed well into the territory of the Home Secretary, a potential rival in the coming leadership contest. There is persistent speculation at Westminster, unconfirmed by either side, that Mr Reid indicated to Mr Brown last week that he was unlikely to stand against him.

Mr Brown said that combining forensic accounting techniques with the expertise of the private, financial and public sectors could result in the creation of a modern-day Bletchley Park, the intelligence centre that cracked the Nazi Enigma Code during the Second World War. This could be used to address three of the most dangerous sources of terrorist finance: charities, money service businesses and financial transactions. There would be a review of the charitable sector and a more stringent licensing system for bureaux de change, cheque cashers and money remitters, which were also subject to abuse by terrorists.

Patrick Mercer, the Tories’ security spokesman, said that there was very little in the speech. “I expected to hear a statement on terrorist financing,” he said. “What I got was an unashamed leadership speech.”

Sir Menzies Campbell, the Liberal Democrat leader, said: “The Chancellor is right to seek better ways to siphon off financial resources from terrorism. But he is wrong to believe that a longer detention time will be effective or acceptable.”

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