The proposed use of phone tapping evidence to secure convictions in terrorist and criminal trials has been shown in secret tests to be unworkable.

Last year Gordon Brown proposed limited use of intercept evidence, gathered by intelligence agencies, in the courts and David Cameron has called for its introduction “so we [can] catch, convict and imprison more terrorists”.

Legal and counter-terrorism sources believe that the extremist cleric Abu Hamza al-Masri could have been jailed for involvement in international kidnapping had intercept material been available to prosecutors.

However, an intelligence watchdog disclosed yesterday that “live testing” of the idea in mock courtroom trials had encountered major obstacles.

Sir Paul Kennedy, the Interception of Communications Commissioner, who inspects intelligence and law enforcement agencies to ensure that intercept operations conform to the terms of the Regulation of Investigatory Powers Act, said that there were “real legal and operational difficulties” and he would “welcome the Government’s acceptance that intercept as evidence should not be introduced”.

Sir Paul, 72, a former Lord Justice of Appeal, also recommended in his annual report that the Wilson doctrine — a 1966 ruling that MPs should never be subject to telephone bugging — should be abandoned. “Why should MPs not be in the same position as everyone else?” Sir Paul said.

The debate about the use of intercept evidence, which includes phone tapping, intercepting mail and unscrambling encrypted e-mails, has raged for years. Lord Goldsmith, QC, the former Attorney-General, and Sir Ken MacDonald, QC, the former Director of Public Prosecutions, are prominent advocates of reform who have argued that using intercept material would result in stronger cases in many terrorist and organised crime trials.

Evidence from phone tapping and other interceptions is widely used in other countries, including the United States, where it has been used to secure convictions against Mafia gangsters. Interceptions made by British agencies can be used in foreign courts.

However, many senior police and intelligence officials have serious concerns that disclosure of intercept material will benefit criminal and terrorist organisations by exposing human sources and revealing the sophisticated technology that they use in covert surveillance.

Last year Downing Street asked Sir John Chilcot, who will chair the inquiry into the Iraq war, to examine the issues and he devised conditions under which intercept evidence might be introduced. Mr Brown said that it should be possible to find a way to use some intercept material as evidence, but added that key conditions on safeguarding national security would have to be met.

Sir Paul said in his report that those conditions — which include agencies such as MI5 retaining control over the intercepted material — could not be met. He said: “Since the Prime Minister’s statement a lot of work has been done to see whether and how these issues and other conditions, intended to protect sensitive techniques, safeguard resources, and ensure that intercept can still be used effectively for intelligence, can be met.”

In another report published yesterday, the Chief Surveillance Commissioner complained that senior police officers and public officials with powers to authorise covert surveillance did not understand their powers and were unwilling to be trained.

Sir Christopher Rose said that he had been disturbed that one police force that was recommended to have training in the operation of surveillance legislation had asked for a two-day course instead of the required five days. He added: “There remain too many chief police officers and senior executives who have yet to receive formal training.”

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