British troops shot dead one of al-Qaeda’s most elusive fugitives yesterday after his extraordinary flight from a US prison in Afghanistan to a luxury villa in the southern Iraqi city of Basra.

Omar al-Farouk, 35, was handpicked by Osama bin Laden to run al-Qaeda’s terror network in South-East Asia and was captured in June 2002, only weeks before he allegedly planned to bomb eight US embassies across the region.

Kuwaiti born, he was groomed at an Afghan camp, and sent to Indonesia where he was arrested, hiding in a mosque. The CIA claimed that his capture had dealt a devastating blow to al-Qaeda. From there he was flown to one of America’s most secure detention centres at Bagram airbase on the outskirts of Kabul.

But Farouk and three fellow al-Qaeda suspects managed to pick the locks and escape across a minefield in July last year.

He later appeared on an Arab television channel taunting his US captors and vowing to carry out terror attacks in America.

Intelligence chiefs were tonight trying to trace Farouk’s international odyssey and discover how he crossed the border into Iraq and set up a hideout in the port city of Basra.

A British army spokesman, Major Charlie Burbridge, told The Times how the military had spent "several days" planning their raid after a tip off from US intelligence last week that Farouk was sheltering in Iraq.

He was hiding in the affluent Tanuma neighbourhood, which is one of the few areas of the city relatively free of armed Shia militias who would have regarded Farouk as an enemy.

Major Burbridge described how before dawn today 250 soldiers from the Princess of Wales’s Royal Regiment surrounded the villa.

When troops stormed the property they were surprised to find Farouk alone in the building.

He shot at the soldiers who told how they had no option but to return fire, killing the man who has been behind a series of terrorist atrocities.

"We wanted to arrest him, but regrettably he opened fire," Major Burbridge said.

Troops found no weapons or explosives cache in the property nor any trace of al-Qaeda propaganda.

There was nothing to suggest that Farouk was plotting an attack on coalition troops nor any other targets in area.

Major Burbridge said it was possible Farouk had rented the house on his own without the help of any militant network in Basra. He is understood to have known the city from his youth.

"He was on the run and had gone on hiding. He thought he could use a safehouse in Basra, but that wasn’t the case," the Major added.

Major Burbridge refused to say when Farouk had slipped into Iraq, nor the route he used, though US intelligence appears to have been shadowing his progress.

Neighbours suggested last night that Farouk had visited Basra before.

A local police commander, Lieutenant-Colonel Kareem al-Zubaidi identified the man by a different name, but said he was a known Iraqi extremist who returned two weeks ago after reportedly fighting US troops in Afghanistan.

There has long been concern that al-Qaeda has established an escape route through Iran and members of bin Laden’s family are known to have been helped to flee from neighbouring Afghanistan.

But the appearance of such a senior Al-Qaeda member in southern Iraq gives credence to reports circulating among Kurdish leaders in Iraq that key figures from bin Laden’s network are now crossing into the country through the poorly policed border with Iran.

An Arab diplomat and a Saudi security official told CBS News at the weekend that al-Qaeda is scaling down its leadership structure in Afghanistan and preparing to move its headquarters to the Middle East.

Farouk was one of the first generation of al-Qaeda militants to be sent on terror operations abroad.

He was groomed at Khalden camp in Afghanistan in the early 1990s where a number of British radicals were trained, including the shoe bomber Richard Reid.

Farouk was given the role of setting up a terror network in Indonesia and extending al-Qaeda’s activities across South-East Asia.

Former associates now in US custody described how Farouq’s linguistic talents meant his ability to bind together rival Muslim groups was as impressive as his taste for destruction.

He orchestrated attacks on Christian churches in Indonesia but his main objective was to orchestrate a series of synchronised bomb attacks on US embassies in the capitals of eight Asian countries including Thailand, Malaysia and the Philippines to coincide with the first anniversary of the 9/11 atrocity.

He was captured in June 2002 hiding in a mosque but three days later the Indonesian authorities handed him over to the US who moved him to Bagram. Already there was Abu Zubaydah, the highest ranking al-Qaeda figure in US hands, who identified his ruthless protegé.

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