BRITAIN'S police and security services have been placed on heightened alert amid fears terrorists will mount a deadly gas attack to mark the first anniversary of the July 7 bombings this week.
The nation's top spies have issued an urgent warning that extremists may be planning to release cyanide gas in a public place - even on the London transport system - as the nation remembers the 52 victims of last year's outrage.
The Security Service (MI5) secretly briefed MPs on the possibility of an anniversary attack in London last week, Scotland on Sunday can reveal.
The Intelligence and Security Committee (ISC), the group of MPs and peers hand-picked by Tony Blair to oversee the nation's counter-terror machinery, were told that alerts were at close to their highest level.
Tomorrow, police will warn that extra vigilance will be needed in the coming weeks. And Gordon Brown will announce a further 40m to help intelligence agencies develop "specific new capabilities", highlighted as a key failing that could have helped head off last year's attacks.
Brown will also reopen the government's war with opponents and civil-rights activists over detaining terror suspects without trial, calling for more than the 28-day limit agreed after a bitter parliamentary battle earlier this year.
"They [the security services] are terrified about the threat," one senior intelligence source said last night. "The real fear is an attack involving gas.
"They say there has been a 'circulating threat' for some time. The anniversary has been identified as the most significant target date. It is the most vulnerable."
Revelations about the official anxiety over the lingering extremist threat at home came as an influential group of MPs confirmed that al-Qaeda remained a dangerous enemy.
In a gloomy report on the progress of the international war on terror, the foreign affairs committee warned that al-Qaeda continued to pose "an extremely serious and brutal threat" to Britain and British interests.
The threat is expected to be at its highest on Friday, when Culture Secretary Tessa Jowell will lead a series of events to commemorate those who died in London last year. Survivors and victims' relatives will join officials to lay wreaths and witness the fixing of plaques at all four bomb sites.
The security forces have so far failed to unearth specific intelligence that would allow them to locate any terrorists poised to launch attacks.
The depth of the concern explains the huge scale of a dawn raid on a house in east London last month. More than 200 police, some armed and others in protective clothing, descended on the house and arrested two brothers of Bangladeshi descent, one of whom was shot during the operation.
Police sources confirm the raid was ordered amid fears that a device capable of delivering lethal cyanide gas was being constructed on the premises, but it failed to uncover any illegal activity.
One parliamentarian briefed on the rising threat level last night said a chemical attack worse than that on the Tokyo underground in 1995 remained a danger. He said: "The terrorists in Tokyo got it wrong, because they only killed six people. If the terrorists we are facing work out how to deliver cyanide gas properly, they could do much more damage."
Tory homeland security spokesman Patrick Mercer said: "One of the reasons they made so much of Forest Gate was that they can't afford to have an incident like that close to 7/7. So even if the intelligence is not perfect, they will act and sort it out when the dust settles. They are certainly very excited at the moment about a series of threats. There are serious fears that there will be an attack, either on the day or very close to the day."
Brown's announcement of extra money to help the security services penetrate extremist groupings, particularly within the Muslim community, comes after an official report suggested the July 7 attacks could have been averted if the security services had had more money to fund all their activities.
The ISC investigation into the London bombings found that, prior to the attacks, the Security Service had come across two of the bombers, Mohammad Siddique Khan and Shazad Tanweer, "on the peripheries" of other operations. Attempts to find out more about them were shelved when "resources were soon diverted back to what were considered to be higher investigative priorities".
The ISC report observed: "The story of what was known about the July 7 group prior to July indicates that if more resources had been in place sooner, the chances of preventing the July attacks could have increased. Greater coverage in Pakistan, or more resources generally in the UK, might have alerted the agencies to the intentions of the July 7 group."
The extra 40m, on top of 85m the Chancellor made available over three years to support the expansion of the intelligence and security agencies, will push their budget over 1.6bn. It is expected to support activities including enhanced electronic surveillance to deal with sophisticated counter-espionage communication techniques.
Brown remains convinced there is a case for extending the period for which terrorist suspects can be detained without charge beyond 28 days, and believes the legislation will need to be brought back to the Commons as more evidence of the need for an extension emerges.
He would couple any extension in the detention period with greater independent, judicial and parliamentary scrutiny of the use of the detention powers - for example, requiring each seven-day extension beyond 28 days to have judicial approval.