The number of British-based Islamic terrorists plotting suicide attacks against "soft" targets is far greater than the Security Services had previously believed, the government paperwork discloses. It is thought the plotters could number more than 2,000.

Under the heading "International Terrorism in the UK", the document - seen by The Sunday Telegraph - states: "The scale of al-Qaeda's ambitions towards attacking the UK and the number of UK extremists prepared to participate in attacks are even greater than we had previously judged." It warns that terrorist "attack planning" against Britain will increase in 2007.

"We still believe that AQ [al-Qaeda] will continue to seek opportunities for mass casualty attacks against soft targets and key infrastructure. These attacks are likely to involve the use of suicide operatives." The document, which has been circulated across Whitehall to MI5, Scotland Yard's Counter Terrorist Command, the Home Office, the Cabinet Office and the Ministry of Defence, also reveals that al-Qaeda has grown into a world-wide organisation with a foothold in virtually every Muslim country in North Africa, the Middle East and central Asia.

MI5 believes that soft targets, such as the transport system and economic targets such as the City of London and Canary Wharf, are most at risk.