The security threat is at its highest level since the September 11, 2001, attacks on the United States and the planning of attacks against British targets will increase further in 2007, the "Extremist Threat Assessment" document said, according to the newspaper.

"The scale of al-Qaeda's ambitions toward attacking the UK and the number of UK extremists prepared to participate in attacks are even greater than we had previously judged," the Sunday Telegraph quoted the document as saying.

Britain suffered its worst peacetime attack in July 2005 when four British Islamists blew themselves up on London's transport network, killing 52 commuters and wounding hundreds.