UK Treasury to get tougher in terror finance fight

LONDON, Oct 10 (Reuters) British finance minister Gordon Brown is expected to call for new powers today to tackle the funding of terrorism that could allow the Treasury to use covert intelligence material for the first time.

Brown will outline new government proposals designed to stop funds reaching anyone in Britain suspected of involvement with terror plots in a speech hosted by the Chatham House thinktank, a government source told Reuters.

Treasury minister Ed Balls will also brief parliament on the proposals today.

In a speech designed to bolster his credentials as a future prime minister, Brown will also touch on issues from North Korea's missile test, to the battle for hearts and minds within Islamic communities and the conditions of British troops serving abroad.

The 55-year-old Scot is favourite to succeed Tony Blair when he steps down as prime minister within the next year, although new contenders could yet emerge for the job.

Blair's government has tightened laws to clamp down on militant groups since four British Islamist suicide bombers killed 52 people on London's transport network on July 7 last year.

The proposed new powers will involve controlling access to benefits and -- more controversially -- using covert intelligence to freeze assets pre-emptively.

Under the current regime, only publicly available material can be used as a justification for freezing assets and a toughening of current laws could prompt criticism from human rights groups.

To reassure the public the new powers are being properly used, the Treasury will set out proposals for much greater parliamentary scrutiny of its actions.

Brown will say he still believes police should have the power to detain terrorist suspects without charge for longer than 28 days.

A revolt by Labour members of parliament last November torpedoed Blair's bid to force through a new law allowing police to hold a terrorism suspect for up to three months without charge, limiting it instead to one month.

REUTERS LL BD1022