CIA spooked by British courts

American spy agencies refused to give Britain's intelligence services full details of a "Mumbai-style" terrorist plot in the UK because they feared that top-secret sources would be exposed, The Daily Telegraph can disclose.

The CIA warned MI6 that al-Qaeda was planning an attack 18 months ago, but withheld detailed information because of concerns it would be released by British courts.

British intelligence agencies were subsequently forced to carry out their own investigations, according to Whitehall sources.

Several potential terrorists were identified with links to a wider European plot, but it is still not known whether the British authorities have uncovered the full extent of the threat.

The breakdown in relations came after the release of US intelligence in the case of Binyam Mohamed, a former Guantanamo Bay detainee who took legal action over his incarceration. The British Government was subsequently forced to pay millions in compensation to him and other detainees.

Conservative ministers are proposing establishing a system of secret justice to allow sensitive intelligence to be heard in British courts behind closed doors, but are facing mounting opposition from the Liberal Democrats.

Nick Clegg, the Deputy Prime Minister and Liberal Democrat leader, has written to the National Security Council and warned that the security services cannot be allowed to ride roughshod over the principle of open justice.

Kenneth Clarke, the Justice Secretary, yesterday (Wednesday) warned that unless judges were allowed to hear evidence from MI5 and MI6 officers behind closed doors lives would be put at risk.

He said: "The Americans have got nervous that we are going to start revealing some of their information, and they have started cutting back on what they disclose.

"I'd love open justice but let's have some common sense here. Open justice cannot be at the expense of lives being lost."
It is understood that details about the identity of intelligence sources and other sensitive information is no longer shared by the CIA.

The issue was raised by President Barack Obama's security advisers with their Downing Street counterparts during David Cameron's visit to Washington last month.

MI6 was said to have been particularly "frustrated" after receiving "only the tip, not the intelligence" about a plot in which armed terrorists dressed as civilians were planning to mount an indiscriminate attack on British soil.

The plot echoed an attack by extremists in Mumbai in 2008, which led to the deaths of 174 people. The CIA is also understood to have retrieved substantial intelligence about potential threats to Britain from documents seized during the raid on Osama bin Laden's compound in Pakistan.

Although information has been passed to British authorities from the intelligence "cache", it is said to be far from a full read-out.

A senior British security source said: "The urgent threat-to-life operational material is still coming, as it should.

"But we see strong signs of a greater reluctance to share some of the other stuff - the building blocks, the bits that let you put the jigsaw together."

Under the plans, intelligence could be disclosed and MI5 and MI6 agents cross-examined in secret courts presided over by security-cleared judges with special lawyers. It would apply to civil cases and inquests, but not to criminal trials. The decision on whether evidence should be considered secretly would be taken by judges rather than ministers, as had been proposed. The role of secret evidence in inquests is also likely to be constrained.

Legal experts and MPs are concerned that the system does not allow defence lawyers to properly test the probity of the evidence.

Yesterday, a parliamentary committee said that the controversial proposals were based on vague predictions and spurious
assertions about the future consequences of not introducing legislation.

It concluded that the plans represented a "radical departure from long-standing traditions of open justice".

Clegg, who is initially said to have supported the proposals, is now understood to be growing increasingly concerned over the plan.

He also gave an interview in which he accused the Government of making a blunderbuss in the presentation of the policy.

Ed Miliband, the Labour leader, wants the legislation to be withheld from next month's Queen's Speech and the Government is expected to water down its plans. Lord Carlile, the Liberal Democrat peer and former independent reviewer of terrorism legislation, said, "We need some consistency from the Government on these issues, and a proper part played by the Government before the political criticism starts, much of it very poorly informed I'm afraid."

The row over the secret justice plans has coincided with growing concerns over proposals to allow the authorities to monitor social media websites and other new forms of web-based communication.

Cameron insisted that the reforms were essential to protect Britons.

He said: "It is the job of the Prime Minister to make sure that we do everything that is necessary to keep our country safe, particularly to keep our country safe from serious and organised crime, and also from terrorist threats that we have faced in this country, that we still face in this country.

"As I see it, there are some significant gaps in our defences, gaps because of the moving-on of technology - people making telephone calls through the internet, rather than through fixed line - but also gaps in our defences because it isn't currently possible to use intelligence information in a court of law without sometimes endangering national security.

"I want us - and the Government wants us - to plug those gaps, but let's be clear, we will do it in a way that properly respects civil liberties."

He added there was still time to deal with everybody's concerns.