Muslims in Lancashire have warned that community cohesion will be damaged if plans to put MI5 agents in the North West get the go-ahead.

Chancellor Gordon Brown plans to base a new intelligence HQ in the North West to check up on religious extremist groups or anyone suspected of having links with Al Qaeda.

Chairman of the Lancashire Council of Mosques, Ibrahim Master, said the move was a misplaced reaction to Muslim opposition to war.

"It must be noted that the Muslim community was not alone in opposing the war in Iraq; three quarters of the country also opposed the war. As was so aptly demonstrated by so many Labour council seats being lost during the local elections in areas where there was only a token Muslim population,"

"There are growing fears amongst the Muslim community that this exercise is challenging their loyalty to Britain. Since last year over six hundred Muslims have been arrested under the Terrorism Act in Britain.

"The fictitious impression created by such a volume of arrests is that there is a problem of loyalty with the British Muslims, but the rate of conviction categorically fails to substantiate this claim."

He added, "We are surprised that the government are condoning such measures. We do not believe the Muslim community are a threat to the national security of Britain. Such fears are totally unfounded. We are law-abiding citizens. Such Islamophobic measures tarnish the image of Muslims and further undermine the excellent race relations that we have in Lancashire'.

The plans are aimed at improving links between specialist officers and the MI5. The Teams of intelligence officers would be based across the North West with computer and surveillance officers weeding out any high risk terrorist activity.

The report follows claims that the security service is to create a new network of bases in the North West, West Midlands and other UK regions which are home to Islamist extremism groups.

A Whitehall official told The Times: "The scale of the terrorist threat is such that MI5 and the police need to be able to work together even more closely, which means that the Security Service must be dispersed in a different way."

It is said that MI5 will place intelligence officers, surveillance teams and analysts across the country and set up a pilot scheme to test the proposal within months.

The idea is thought to be a response to the emergence of connections between young Britons living outside London and international terrorist groups.

In a separate move, Ken Macdonald QC, the Director of Public Prosecutions, is understood to be seeking extended powers for prosecutors and police who deal with suspected terrorists.