'Worrying gaps' in defence against further attacks

• Government report attacks UK counter-terrorism campaign

• Britain's policy on Iraq and over-reliance on US has made life difficult for UK

• Publication comes amid speculation over intelligence shortcomings

Key quote

"Riding pillion with a powerful ally has proved costly in terms of British and US military lives, Iraqi lives, military expenditure, and the damage caused to the counter-terrorism campaign." - GOVERNMENT-FUNDED REPORT

Story in full BRITAIN'S counter-terrorism campaign relies too heavily on the United States and has been hampered by the war in Iraq, according to an influential government-funded report published today.

It highlights a shortage of surveillance officers and describes "worrying gaps" in the country's preparedness for another attack, particularly outside London.

Its publication comes amid growing concerns that intelligence shortcomings allowed the London suicide bombers to slip through the net.

The report says that when it comes to counter-terrorism, Britain is not an equal partner to the US, but operates more like a "pillion passenger compelled to leave the steering to the ally in the driving seat".

The authors also assert that involvement in Iraq has made life more difficult for the UK and for the wider coalition against terrorism. "It gave a boost to the al-Qaeda network's propaganda, recruitment and fundraising, caused a major split in the coalition, provided an ideal targeting and training area for al-Qaeda-linked terrorists, and deflected resources and assistance that could have been deployed ... to bring bin Laden to justice," they say.

"Riding pillion with a powerful ally has proved costly in terms of British and US military lives, Iraqi lives, military expenditure, and the damage caused to the counter-terrorism campaign."

The report also warns that al-Qaeda has been actively seeking chemical, biological, radiological and nuclear weaponry, and says: "Their track record shows that they would have no compunction about using this type of weapon to cause large numbers of civilian deaths."

The study was co-authored by Professor Paul Wilkinson, of St Andrews University, and published as part of a study set up by the Economic and Social Research Council, which receives most of its 100 million budget from the government.

Meanwhile, the security services came under further pressure yesterday over claims that MI5 last year checked out Mohammad Sidique Khan - now regarded as the ringleader of the four suicide bombers - but decided he posed no risk and did not place him under surveillance.

Khan, 30, was subject to a routine threat assessment by MI5 officers when his name cropped up during an investigation into an alleged plot to explode a 600lb lorry bomb outside a target in London.

The Scotsman understands the security service considered him to be only a minor criminal - he had been cautioned for shoplifting - which would not, in itself, be enough to bring him to the attention of anti-terrorism officials, whose remit does not include "ordinary" crime.

But even the revelation that Khan's name was known to MI5 undermines earlier assertions that the London bombers were "clean skins", completely unknown to the authorities.

The government, however has rallied to defend the police and intelligence services over the London attacks, in which at least 55 people died. Tony Blair, the Prime Minister, will on Thursday meet senior police officers and intelligence chiefs to review anti-terror laws and discuss events since the attacks.

Downing Street made clear yesterday that Mr Blair still sees no case for an independent review of the intelligence before the attacks.

"The priority for the police and the security service is to get on with fighting terrorism," a spokesman said.

While MI5 is understood to be conducting its own internal review, there is little political appetite for an external investigation. "Now is not the time for any form of inquiry," Lord Falconer, the Lord Chancellor, said.

Hilary Benn, the International Development Secretary who met Khan at the House of Commons last July, insisted there was no way to have known of his plans at the time. "The truth is that no-one had any idea these individuals ... were engaged in this activity," he said.

The Conservatives, too, have softened their line.

The day after the London attacks, David Davis, the shadow home secretary, called for an inquiry into the intelligence background. But yesterday, he dropped that call, saying he would be happy with MI5's internal review.

In Pakistan yesterday, the authorities were questioning a businessman whose mobile number was listed on the phone records of one of the bombers.

One intelligence officer said the businessman, who was questioned near the eastern city of Sialkot, had explained that he had many business contacts in England, but he did not provide a full account of the telephone link with the alleged bomber.

Mobile phone records passed on by British police showed that three of the four bombers had made calls to Pakistan and had received calls from there.

Intelligence officials said they were also checking a list of calls made from the home of one of the bombers, Shahzad Tanweer, and had spoken to three people whose numbers were on the list before eliminating them from their inquiries.

Intelligence agents have been to a religious school believed to have been visited by Tanweer, questioning students, teachers and administrators. Agents were sent to the Jamia Manzoorul Islam seminary in Lahore, one of two madrassas allegedly visited by Tanweer on a trip to Pakistan. Agents also went to at least two other radical Islamic centres, armed with a dossier on Tanweer.

In Israel, security sources have played down a report that Khan had helped to plan a pro-Palestinian suicide attack in Tel Aviv two years ago.

An Israeli newspaper claimed local defence officials suspected he had helped two British Muslims carry out a suicide bombing at a beachfront bar that killed three people.

Six men were arrested in the Beeston area of Leeds last night on suspicion of immigration offences. West Yorkshire Police said the arrests were not linked with the London attacks.