A suspected terrorist who scored a legal victory against the Government this week is a senior al-Qaeda operative living openly in London, security agencies say.

The man, who can be identified only as G, is one of five people who challenged the Treasury’s powers to freeze terrorist suspects’ bank accounts in a successful High Court action.

Yesterday security sources described him as “a key player” who acts as a conduit between British-based extremists and the al-Qaeda leadership hiding out in Pakistan and Afghanistan.

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Under the Government’s al-Qaeda Order, G was one of 58 people forced to apply to the Treasury for a licence to obtain £10 a week for basic expenses. His grocery receipts had to be sent to the Treasury for scrutiny and he was required to seek permission if he wanted to borrow a car, obtain an Oyster card or buy shoes.

The Times has seen files alleging that the man is involved in recruiting and radicalising young Muslims in Britain and organising travel to Pakistan and Iraq for would-be jihadis.

One document states that he “maintains contact with a significant number of terrorists, including senior al-Qaeda officials in Pakistan”. G, who lives in East London, is understood to be the subject of round-the-clock surveillance by the police and MI5.

He strongly denies any involvement in terrorism and maintains that he is a Muslim missionary on behalf of an apolitical, nonviolent religious group.

A judge ruled on Thursday that financial sanctions imposed on him by the Treasury, which led to his bank account being frozen and his benefit payments stopped, were unfair and unlawful. Mr Justice Collins said that the Government had acted illegally by devising financial sanctions without consulting Parliament.

The judge banned publication of G’s name but The Times is aware of his identity, which is published on a United Nations Security Council list of terrorist suspects linked to al-Qaeda and the Taleban. He also appears on lists maintained by Interpol and the European Union.

One security document outlining the allegations against him states: “[G] has organised travel to Pakistan for individuals seeking to meet with senior al-Qaeda individuals and to undertake jihad training. Several of these individuals have returned to the UK to engage in covert activity on behalf of al-Qaeda. Additionally [G] has provided support and facilitated the travel of UK-based individuals to Iraq to support the insurgents’ fight against coalition forces.”

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