UK lawmakers warn of threat from Iranian terrorism

LONDON, June 29 (Reuters) British lawmakers said today that Iranian state-sponsored terrorism may target British interests if diplomatic efforts to curb Tehran's nuclear ambitions fail.

World powers are waiting for an Iranian response on a package of incentives aimed at halting its nuclear programme, which the West suspects is a cover for building an atomic bomb.

Britain is one of the United Nations Security Council's permanent members that made the offer to Tehran.

The British parliament's Intelligence and Security Committee said there was ''increasing tension'' over Iran's nuclear pursuits, and its support for groups such as the Lebanese Hizbollah guerrilla group.

''There is a possibility of an increased threat to UK interests from Iranian state-sponsored terrorism should the diplomatic situation deteriorate,'' the committee said in its annual report.

The report did not specify what it meant by either state-sponsored terrorism or British interests.

The British government has said the technology used in a series of roadside bombs on British troops in southern Iraq point to a connection with Iran.

Prime Minister Tony Blair's spokesman said the government would give a full response to the ISC report in coming months.

The committee, which took evidence from security chiefs, also said the security service MI5 was expanding rapidly with staff numbers expected to rise about 50 per cent in the next three years.

International counter-terrorism was also taking up more of the service's effort than before, comprising 52 per cent of effort in 2004-05 from about a third in 2002-03.

REUTERS SHR RS2200