The ruling by Lady Justice Hallett on the scope of the inquest into the 7 July 2005 London suicide bombings is the latest in a series of recent blows inflicted on MI5. It also drives home the point that it is the courts, and not parliament, that are calling the security and intelligence to account.

Her ruling may not go as far as the relatives of the victims and the wounded would have wanted. But the appeal court judge makes clear she was not intimidated by suggestions from MI5 lawyers that a fresh investigation into what the security service and police knew about the bombers before the attack would have dire consequences for Britain's national security and could only help al-Qaida and its supporters.

"To my mind," she said, "it is not too remote to investigate what was known in the year or two before the alleged bombings. Plots of this kind are not developed overnight".

In another telling passage, she said that as far as the parliamentary Intelligence and Security Committee (ISC) is concerned, "whatever its good intentions, it could not fulfill the role of independent investigator".

She added: "There may be practical difficulties in doing more, it may take some time, but it is a counsel of defeat to say the difficulties cannot be overcome before one has even embarked upon the task".

MI5, argued, and told the ISC, that although two of the suicide bombers – Mohammed Sidiique Khan and Shehzad Tanweer – had been on its radar, they were not identified at the time and the evidence was they may have been involved in fraud, not planning terror plots in Britain.

MI5 also argued that they did not have enough resources to follow individuals considered at the time less dangerous than others – notably those involved in fertiliser bomb plots to blow up targets around London. Those plotters were caught.

We shall see how far Hallett gets in her investigations and how much she will publish without coming against a brick wall of "national security" claims.

Her ruling comes a short time after the appeal court threw out Labour government claims, supported by MI5, that evidence relating to complicity in the torture or inhuman treatment of Binyam Mohamed – the British resident secretly jailed before being transferred to Guantánamo Bay – must be suppressed.

Her ruling also comes a day after William Hague, the foreign secretary, said that a judge should investigate the mounting evidence and allegations of UK security and intelligence agency involvement in abuses abroad.