Intelligence officers now believe there are around 2,000 suspected terrorists in Britain, Smith said, an increase from a figure of 1,600 given last year by departing MI5 chief Eliza Manningham-Buller.

Prime Minister Gordon Brown plans to set out options to toughen anti-terrorism laws on Wednesday and is expected to propose extending the length of time terrorist suspects can be held for questioning, or scrapping the limit altogether.

Brown was scheduled to make a statement to parliament setting out suggested revised laws, likely to include a recommendation to allow the use of wiretaps in court cases, a practice currently banned in Britain.

British lawmakers rejected the government's bid to allow police to detain suspects without charge for 90 days in 2005, forcing it to accept a compromise of 28 days.

But Smith said since the rule was introduced last year, six suspects had been questioned up to the 28-day limit, three of whom were charged in connection with an alleged plot to down U.S.-bound airliners. Three others were released.

"This all gives us a strong view that the time is right to reconsider whether we should allow longer than 28 days for pre-charge detention," Smith told Parliament's Home Affairs Select Committee.

Proposals to tighten terror laws follow failed attacks last month, when a pair of luxury cars packed with gas cylinders and nails were found in central London and two men crashed a Jeep Cherokee loaded with fuel canisters and gasoline into security barriers at Glasgow airport's main terminal, setting it ablaze.

Security officials said the time-consuming nature of the inquiry into the London and Scotland plots, which involved investigations across Britain, Iraq, Australia, India and Jordan, also supported the case for increased custody limits.

Smith said Brown's statement would set out options for proposals to increase the limit, but will not back any one particular solution. Brown's spokesman, Michael Ellam, declined to give details in advance. "We'll be setting out those issues in the statement," he said.

Proposals to toughen anti-terrorism laws could set Brown on a collision course with civil liberties campaigners.

Shami Chakrabarti, director of human rights group Liberty, said extending the custody limit for terror suspects beyond 28 days would effectively create a new system of internment, "the most chilling and counterproductive tool in Britain's anti-terror history."

Figures released last week showed that between September 2001 and March 2007, 1,165 people were arrested under terrorism laws, but only 241 were charged with terrorism offenses.

Of those, 41 have been convicted in courts and 114 are awaiting trial, the Home Office statistics showed.

The Home Office said around 200 other offenders had been charged with criminal offense not covered by anti-terrorism laws, including murder, firearms offenses and fraud.