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Siddartha “Sid” Dhar, whose property firm flopped, claimed income support, £247-a-month child benefit for four children, and tax credits.

He used the state handouts to help fund his journey to Syria to become a terrorist.

Yesterday the Government was accused of a major security lapse after it emerged the former bouncy castle salesman slipped out of Britain while on police bail for alleged terror crimes.

Dhar, 34, nicknamed Jihadi John after the terror state’s first British executioner, is suspected of being the masked killer in a new Isis video in which five prisoners are shot dead.

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Dhar, who converted to Islam from Hinduism, was arrested in 2014 alongside preacher Anjem Choudary on suspicion of belonging to banned poppy-burning group al-Muhajiroun.

The day after he was granted bail he, wife Aisha and their children took a coach from London to Paris from where they travelled to Syria to join Isis.

Six weeks later a letter arrived at Dhar’s home in Walthamstow, north London, asking him to surrender all travel documents to police.

Shadow Home Secretary Andy Burnham has now demanded an inquiry. He said Dhar had been arrested six times for terror offences and was well known to the authorities but was still able to leave.

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Mr Burnham told MPs: “Something has clearly gone very seriously wrong.” Dhar taunted authorities by posting a photo online in which he held his baby son and a rifle, captioned: “What a shoddy security system Britain must have.”

Home Secretary Theresa May said bail conditions were an operational matter for police. The Department for Work and Pensions said: “Payments are automatically stopped once we know someone has moved abroad.”