Security services dismissed two pieces of intelligence that could have helped them prevent the Manchester attack, a major report has found.

David Anderson QC, the former Independent Reviewer of Terrorism Legislation, said he could not prove the attack would have be been stopped but that it “might have been averted had the cards fallen differently”.

MI5 received two separate leads in the months before Salman Abedi’s bombing at Manchester Arena that were assessed as not to be linked to terrorism, when in fact they were “highly relevant” to the planned attack.

MI5 chief warns that Britain is facing an unrelenting terrorist threat

“With the benefit of hindsight, the wrong conclusions were drawn,” Mr Anderson told reporters at a briefing in London.

“Had people understood it in a different way, I think an investigation would have been opened into Salman Abedi, and who knows what it would have found.”

MI5’s internal assessment claimed that a new investigation would not have prevented the attack, but Mr Anderson said it would have “plainly been preferable” to open a new probe into Abedi.

Abedi had already been put under active investigation twice – once over his contact with another subject of interest in 2014, when he was considered a “low residual risk”, and again in October 2015 because of indirect contact with an Isis figure in Libya.

​MI5 also missed the opportunity to put a notice in on Abedi that would have triggered an alert when he tried to re-enter the UK from Libya four days before the bombing, and would have allowed him to be searched and questioned at the airport.

He was not the subject of a live investigation at the time, but the same report also showed London Bridge attack ringleader Khuram Butt had been under surveillance for almost two years.

Mr Anderson said the “hardest question to answer” was how Butt managed to launch a terror attack while under surveillance on suspicion for planning one.

Attackers shouted 'this is for Allah' says London Bridge eyewitness

Police and the Crown Prosecution Service decided not to launch a separate investigation after he was filmed praying to an Isis flag during a television documentary on a prolific group of Islamists, and believed his focus was moving away from terror attacks to travelling abroad.

An extensive intelligence operation had not flagged Butt’s accomplices Yousef Zaghba and Rachid Redouane as threats and “much remains unknown, even today, about the mindset of the three conspirators and the planning of the attack”, the report concluded.

It revealed that Zaghba was put on a Europe-wide warning list after telling officials at Bologna Airport he was travelling to Turkey to be a “terrorist”, but British authorities took no action.

Months later, Italy asked MI5 for information on Zaghba but it did not respond, possibly because the request ”arrived in the incorrect mailbox” and was not chased up.

Mr Anderson said the terror threat facing the UK “is not diminishing”, with rising numbers of suspects and shifting methods putting ever greater strain on security services.

He warned of the risk presented by 20,000 former “subjects of interest” whose investigations have been closed – the group Abedi and Westminster attacker Khalid Masood fell into.

“Their dangers are exacerbated by the fact they are not under active investigation,” Mr Anderson said in his report.

MI5 has brought in measures like reviews and data analysis to mitigate the risk but it does not always work. A meeting to reassess Abedi was scheduled to take place nine days after he committed his attack.

Meanwhile, Masood had resumed contact with the extremists linked to Anjem Choudary’s banned al-Muhajiroun group but the activity “was not picked up in any way” – despite it being the original cause of MI5’s attention.

Manchester explosion in pictures Show all 37 1 /37 Manchester explosion in pictures Manchester explosion in pictures People running down stairs as they attempt to exit the Manchester Arena after a blast, where U.S. singer Ariana Grande had been performing, in Manchester Twitter/@ZACH_BRUCE/ via REUTERS Manchester explosion in pictures Helpers attend to people inside the Manchester Arena after a suspected suicide bomber detonated an explosive device at the end of an Ariana Grande concert, killing 22 people PA wire Manchester explosion in pictures Armed officers guard outside a hotel near the Manchester Arena following reports of an explosion, in Manchester, Britain EPA Manchester explosion in pictures Police officers are seen outside the Manchester Arena, where U.S. singer Ariana Grande had been performing, in Manchester, northern England Reuters Manchester explosion in pictures MANCHESTER, ENGLAND - MAY 23: Police escort members of the public from the Manchester Arena on May 23, 2017 in Manchester, England. An explosion occurred at Manchester Arena as concert goers were leaving the venue after Ariana Grande had performed. Greater Manchester Police have confirmed 19 fatalities and at least 50 injured. (Photo by Christopher Furlong/Getty Images) Getty Images Manchester explosion in pictures MANCHESTER, ENGLAND - Emergency services arrive close to the Manchester Arena on May 23, 2017 in Manchester, England. There have been reports of explosions at Manchester Arena where Ariana Grande had performed this evening. Greater Manchester Police have have confirmed there are fatalities and warned people to stay away from the area. (Photo by Dave Thompson/Getty Images) Getty Images Manchester explosion in pictures MANCHESTER, ENGLAND - MAY 23: Police escort members of the public from the Manchester Arena on May 23, 2017 in Manchester, England. An explosion occurred at Manchester Arena as concert goers were leaving the venue after Ariana Grande had performed. Greater Manchester Police have confirmed 19 fatalities and at least 50 injured. (Photo by Christopher Furlong/Getty Images) Getty Images Manchester explosion in pictures Medics deploy at the scene of a reported explosion during a concert in Manchester, England on May 23, 2017. British police said early May 23 there were "a number of confirmed fatalities" after reports of at least one explosion during a pop concert by US singer Ariana Grande. Ambulances were seen rushing to the Manchester Arena venue and police added in a statement that people should avoid the area / AFP PHOTO / Paul ELLIS (Photo credit should read PAUL ELLIS/AFP/Getty Images) AFP/Getty Images Manchester explosion in pictures Police and fans close to the Manchester Arena, after reports of an explosion Getty Images Manchester explosion in pictures There have been reports of explosions at Manchester Arena where Ariana Grande had performed Getty Images Manchester explosion in pictures Police deploy at scene of explosion in Manchester, England, at a concert in Manchester Arena AFP/Getty Images Manchester explosion in pictures Police stand by a cordoned off street close to the Manchester Arena Getty Images Manchester explosion in pictures Police deploy at scene of explosion in Manchester, England AFP/Getty Images Manchester explosion in pictures Police deploy at scene of a reported explosion during a concert in Manchester, England, on May 23, 2017. British police said early May 23 there were "a number of confirmed fatalities" after reports of at least one explosion during a pop concert by US singer Ariana Grande. Ambulances were seen rushing to the Manchester Arena venue and police added in a statement that people should avoid the area AFP/Getty Images Manchester explosion in pictures An ambulance drives away from the Manchester Arena, where U.S. singer Ariana Grande had been performing, in Manchester Reuters Manchester explosion in pictures Police escort members of the public from the Manchester Arena in Manchester, England. Getty Images Manchester explosion in pictures A woman sits in the street in a blanket near the Manchester Arena as police guard the area following reports of an explosion, in Manchester, Britain EPA Manchester explosion in pictures Two women wrapped in thermal blankets stand near the Manchester Arena, where US singer Ariana Grande had been performing, in Manchester Reuters Manchester explosion in pictures A Royal Logistic Corps (RLC) bomb disposal robot is unloaded outside the Manchester Arena following reports of an explosion, in Manchester. At least 19 people have been confirmed dead and others 50 were injured, authorities said. It is being treated as a terrorist incident until police know otherwise EPA Manchester explosion in pictures A Royal Logistic Corps (RLC) bomb disposal robot is unloaded outside the Manchester Arena following reports of an explosion, in Manchester EPA Manchester explosion in pictures Members of the public receive treatment from emergency service staff at Victoria Railway Station close to the Manchester Arena on May 23, 2017 in Manchester, England. There have been reports of explosions at Manchester Arena where Ariana Grande had performed this evening. Greater Manchester Police have have confirmed there are fatalities and warned people to stay away from the area Getty Images Manchester explosion in pictures Armed police after a suspected terrorist attack at the Manchester Arena at the end of a concert by US star Ariana Grande left 19 dead PA wire Manchester explosion in pictures Emergency services arrive close to the Manchester Arena in Manchester Getty Images Manchester explosion in pictures An amoured police vehicle patrols near Manchester Arena in Manchester Getty Images Manchester explosion in pictures A man carries a young girl on his shoulders near Victoria station in Manchester AFP/Getty Images Manchester explosion in pictures Police officers stand at the Miller Street and Corporation Street Crossroads, in front of the Manchester Arena in Manchester, England Getty Images Manchester explosion in pictures Police block a road near to the Manchester Arena in central Manchester, England AP Manchester explosion in pictures Armed police patrol near Victoria station in Manchester, northwest England. Twenty two people have been killed and dozens injured after a suspected suicide bomber targeted fans leaving a concert of US singer Ariana Grande in Manchester Getty Images Manchester explosion in pictures Police forensic officers leave the Manchester Arena as they investigate the scene of an explosion in Manchester Getty Images Manchester explosion in pictures A forensic officer collects evidence on a walkway between Victoria station and Manchester Arena following a deadly terror attack in Manchester, Getty Images Manchester explosion in pictures A woman and a young girl wearing a t-shirt of US singer Ariana Grande talks to police near Manchester Arena following a deadly terror attack in Manchester, Getty Manchester explosion in pictures epaselect epa05982725 Susan Walton and daughter Katie, 10 (pictured), who attended the concert of Ariana Grande at the Manchester Arena, are seen in Manchester, Britain, 23 May 2017. According to a statement released by the Greater Manchester Police on 23 May 2017, police responded to reports of an explosion at Manchester Arena on 22 May 2017 evening. At least 19 people have been confirmed dead and around 50 others were injured, authorities said. The happening is currently treated as a terrorist incident until police know otherwise. According to reports quoting witnesses, a mass evacuation was prompted after explosions were heard at the end of US singer Ariana Grande's concert in the arena. EPA/NIGEL RODDIS EPA Manchester explosion in pictures Mayor of Greater Manchester Andy Burnham and Manchester City Council Leader Sir Richard Leese speak to the media outside Manchester Town Hall after a suicide bomber killed 22 people, including children, as an explosion tore through fans leaving a pop concert in Manchester Dave Higgens/PA Wire Manchester explosion in pictures The media gather behind a police cordon in Manchester Getty Images Manchester explosion in pictures Flowers left close to the Manchester Arena, the morning after a suicide bomber killed 22 people, including children, as an explosion tore through fans leaving a pop concert in Manchester Danny Lawson/PA Wire Manchester explosion in pictures Ariana Grande concert attendees Karen Moore and her daughter Molly Steed, aged 14, from Derby, leave the Park Inn where they were given refuge after last night's explosion at Manchester Arena Getty Manchester explosion in pictures Signs saying 'We love Manchester' are displayed in a window in Manchester, England Getty Images

Neither Redouane or Zaghba were known to the agency, nor was the suspected Finsbury Park attacker Darren Osborne.

Mr Anderson’s findings on that atrocity could not be published because of ongoing court proceedings, nor could those on the alleged involvement of Abedi’s younger brother in the Manchester bombing.

In a series of internal reviews, MI5 concluded its actions in all cases were “sound on the basis of information available at the time”.

But Mr Anderson made a series of 126 recommendations, including calling on MI5 to improve intelligence sharing with police and other agencies, while standardising triage assessments across the country and both Islamist and far-right terrorism.

He said neighbourhood policing was particularly crucial to counter-terror work, as forces call for more funding to mitigate real-term budget cuts in the area.

Mr Anderson also recommended increased cooperation with the private sector, such as Amazon and other online retailers, to improve the detection of potential terrorists attempting to buy explosive components and weapons.

He called for a joint “lone actor strategy” to be drawn up between MI5 and police, and to increase efforts to receive and process referrals to Prevent.

Responding to the report, Amber Rudd praised security services for their work to prevent nine terror plots thwarted so far this year, while investigating 3,000 current subjects of interest.

“We should be united in our clarity that it lies squarely with those whose cowardly acts killed 36 innocent people this year, and those who encouraged them,” the Home Secretary told the House of Commons.

Home Secretary Amber Rudd has denied recent requests for increased police funding by forces saying they are struggling to cope with the terror threat and increased demand (PA)

“At the same time, we must learn all that we can from these attacks, and make sure our overall counter-terrorism response is equal to the shift we have seen in the threat.”

She has commissioned Mr Anderson to review the progress into his recommendations over the coming year and hinted at an increase in police funding to counter terrorism, which will be announced in the coming weeks.

Diane Abbott, the Shadow Home Secretary, said it was“worrying” that several terrorists were known to security services and called for budget increases for neighbourhood policing.

MI5 and the police said they were committed to learning and improving to meet the growing terror threat, after their internal operational improvement reviews were assured by Mr Anderson.

“Intelligence is always imperfect and counter-terrorism work requires tough professional judgements,” a spokesperson for the Metropolitan Police said. “Although we work tirelessly to keep the country safe, the reality of the terrorist threat means that we will not stop every attack.”

Cressida Dick, commissioner of the Metropolitan Police Service, said many of the reforms require new technology, and better infrastructure and resources, adding: “The growth in the number of dangerous individuals who have been radicalised is a major issue for us.

“We will be redoubling our efforts in enforcement activity both to disrupt and confront the threat and to safeguard the vulnerable from radicalisation.”

Andrew Parker, the director general of MI5, said the agency would continue to adapt to “stay ahead of the country’s adversaries” and take on Mr Anderson’s recommendations.

He added: “We and our partner agencies used the harsh light of hindsight under independent challenge to ensure we squeezed every drop of learning out of these dreadful events.