MI5 warning over probe into July 7 ringleader

Bereaved families want to use the forthcoming inquests into the deaths of those killed to ask security service officials why they did not follow up Mohammad Sidique Khan after he was witnessed meeting known terror suspects.

But MI5 told a hearing at the Royal Courts of Justice in London to decide the scope of the inquests that allowing this would aid those planning the next atrocity.

Neil Garnham QC, counsel for the Home Secretary and MI5, described the 2005 London bombings as "the deliberate action of evil and callous killers".

But he went on: "The appalling truth is, however, that there are people out there who applauded and celebrated this appalling act. And there are others who would like to repeat it."

Mr Garnham told the hearing that allowing the bereaved families' lawyers to question at the inquests why Khan, from Dewsbury, was not fully investigated might provide al Qaida plotters with an "invaluable weapon".

"Can there be much doubt that potentially the security service's answer to that question would be of the greatest interest to an intelligent planner of the next terrorist outrage?" he said.

In early 2004 Khan was watched, photographed and followed by counter-terrorism officers during an inquiry into a group of extremists planning a fertiliser bomb attack. But MI5 concluded putting him under surveillance was not justified.

Khan, 30, and three other suicide bombers killed 52 innocent people when they detonated explosives on three Tube trains and a bus in central London on July 7 2005. Three of the four bombers had connection with the Beeston area of Leeds.

The coroner, Lady Justice Hallett, must decide what form the inquests – expected to start in October – should take.