Former MI5 boss Dame Stella Rimington accused the Government of exploiting people’s fear of terrorism to restrict civil liberties.

Dame Stella, who stood down as the Security Service’s Director General in 1996, also accused the USA of going too far, claiming the Guantanamo Bay camp and allegations of torture had been a recruiting sergeant for extremists.

Her comments came as a report by a panel of leading judges and lawyers warned measures to tackle terrorism have undermined international human rights laws.

In an interview with the Spanish newspaper La Vanguardia, Dame Stella said: “Since I have retired I feel more at liberty to be against certain decisions of the Government, especially the attempt to pass laws which interfere with people’s privacy.”

In the interview, published in the Daily Telegraph, she continued: “It would be better that the Government recognised that there are risks, rather than frightening people in order to be able to pass laws which restrict civil liberties, precisely one of the objects of terrorism: that we live in fear and under a police state.”

Dame Stella, 73, has been a harsh critic of the Government’s policies, including attempts to extend pre-charge detention for terror suspects to 42 days and the controversial ID cards plan.

She added: “The US has gone too far with Guantanamo and the tortures. MI5 does not do that.

”Furthermore it has achieved the opposite effect: there are more and more suicide terrorists finding a greater justification.”

A study published yesterday by the International Commission of Jurists (ICJ) found “many states have fallen into a trap set by terrorists” by introducing measures which undermine the values they seek to protect.

The panel warned that exceptional “temporary” counter-terrorism measures are becoming permanent features of law and practice.

The report condemned the use of “notorious” counter-terrorism tactics such as torture, disappearances, arbitrary and secret detention.

Former Irish president Mary Robinson, the president of the ICJ said: “Seven years after 9/11 it is time to take stock and to repeal abusive laws and policies enacted in recent years.

”Human rights and international humanitarian law provide a strong and flexible framework to address terrorist threats.”