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Updated: Sep 20, 2015 18:41 IST

The United Kingdom's spy agency, MI5, is paying Muslims across the country to snoop on homegrown Islamist extremists in short-term missions to avert terror strikes, The Guardian has reported.

"Individuals across the UK, including in Manchester and London, are being employed on temporary assignments to acquire intelligence on specific targets, according to sources within the Muslim community. One said that they knew of an informant recently paid £2,000 by the British security services to spy on activities relating to a mosque over a six-week period," the newspaper reported.

The use of payments to gather intelligence prompted warnings that the system risked producing information "corrupted" by the money on offer, according to the report.

The initiative is being co-ordinated under the UK government's official post-9/11 counter-terrorism strategy.

Last year, Britain raised its terrorism threat level to 'severe', the second highest category which means a militant attack is considered highly likely. It was largely due to the danger the authorities say is posed by Islamic State (IS) fighters and the hundreds of Britons who have joined them.

The Security Service, commonly known as MI5 (Military Intelligence, Section 5), is Britain's domestic counter-intelligence and security agency - part of the intelligence machinery alongside the Secret Intelligence Service (SIS; also known as MI6) focused on foreign threats, Defence Intelligence (DI) and Government Communications Headquarters (GCHQ).

The programme is "driven by the (intelligence) agencies, it's a network of human resources across the country engaged to effectively spy on specific targets. It's decent money," said another source.

The sources did not divulge the number of informants receiving government funding or how much of the agency's national security budget is allocated to such transactions.

However, the use of payments to gather information prompted calls for caution from senior figures in the Muslim community, who warned that such transactions could produce tainted intelligence.

Salman Farsi, spokesman for the East London Mosque, the largest in the UK, said: "We want our national security protected but, as with everything, there needs to be due scrutiny and we need to ensure things are done properly.

"If there's money on the table, where's the scrutiny or the oversight to ensure whether someone has not just come up with some fabricated information? Money can corrupt."

Lessons should be learned from the government's central counter-radicalisation programme, called Prevent, which was introduced following the July 7 bombings, but despite tens of millions of pounds spent and hundreds of initiatives has been criticised for failing to achieve its goals, Farsi said.

He added: "When they started dishing out money, everyone was willing for a bit of money to dish the dirt, make up stuff. There's good work to be done, but quite frankly you don't need to send in informants to mosques to find out what's going on. We need a fresh approach, genuine community engagement."

With inputs from agencies