Reid warns of 'no guarantees' in terror fight

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Addressing a counter terrorism conference in central London, Mr Reid said: "Scaring people does not produce security. We are led to value security through what our liberties enable us to appreciate."

In the speech to the conference, organised by the Royal United Services Institute, the Home Secretary went on: "I don't need to remind you of al Qaida's declared aim to 'bleed us to bankruptcy' and I don't need to remind you of their call for attacks on the West's energy supplies which would have enormous, incalculable damage if they were able to be achieved.

"It is easy to appreciate the devastation of a physical attack and what it can bring but we must not underestimate the potentially devastating consequences of an electronic attack."

Mr Reid guaranteed that the police and security services were fully committed: "The proven dedication and commitment of our police, security and armed services can be taken for granted but their capacity, like any organisation, cannot be taken for granted to always get it right.

"The pace, scale and intensity of innovation our adversaries are capable of allows no room for complacency. We need to be faster, brighter and more agile than our adversaries."

He emphasised the important role the private sector and academia will play in combating terrorism by "making innovation happen...through healthy markets rather than the blighted prospects on offer from our adversaries".