The government protested to the US over the torture of terror suspects, the former head of MI5, Dame Eliza Manningham-Buller revealed last night.

She also said the Americans concealed from Britain the waterboarding of Khalid Sheikh Mohammed, the alleged mastermind of the September 2001 attacks.

"The Americans were very keen that people like us did not discover what they were doing," Lady Manningham-Buller told a meeting at the House of Lords.

She also admitted MI5 were slow to recognise that the US was torturing detainees. Asked if Britain protested, she replied: "We did lodge a protest." She declined to elaborate but it is believed that the protests were made at ministerial level.

Manningham-Buller was answering questions after delivering a lecture in parliament sponsored by the Mile End study group set up by Queen Mary, University of London.

She said that in 2002 or 2003 she questioned how the US was able to supply Britain with intelligence gleaned from Sheikh Mohammed.

"I said to my staff, 'Why is he talking?' because our experience of Irish prisoners and terrorists was that they never said anything," she said.

"They said the Americans say he is very proud of his achievements when questioned about it. It wasn't actually until after I retired that I read that, in fact, he had been waterboarded 160 times," Manningham-Buller said.

She criticised senior figures in the Bush administration, including the president himself, Dick Cheney, the vice-president, and Donald Rumsfeld, the defence secretary for their attitude towards the treatment of terror suspects. She added: "Nothing, even saving lives, justifies torture."

Referring to criticism of MI5, and notably evidence in the mistreatment of the UK resident Binyam Mohamed, she said in her speech: "The allegations of collusion in torture and lack of respect for human rights will wound [MI5 officers] personally and collectively and, in some respects, whether proven or not, will make it harder for them to do their job."

Last month, Lord Neuberger, the master of the rolls, said MI5's insistence in a court case that it was unaware of the harsh treatment of some detainees held overseas in CIA custody was unreliable.

Manningham-Buller confirmed that Britain was aware of mistreatment cases before she left office.

In an original draft of a ruling, Neuberger also criticised MI5's supposed lax attitude toward the mistreatment of detainees. Manningham-Buller's successor as MI5 director, Jonathan Evans, has rejected the claims, and warned that the courts risk being exploited by those seeking to undermine British counterterrorism work.

But Manningham-Buller said she believes the allegations of complicity in torture could disrupt the future work of MI5 staff.

She spent 33 years in British intelligence, and was head of MI5 between 2002 and 2007. She said British spies are proud to be quietly effective, unlike the "gung-ho UK" intelligence officers portrayed in TV dramas.

"One of the sad things is Cheney, Rumsfeld and Bush all watched 24." Manningham-Buller said, referring to the popular TV show about a counterterrorist agent. She said future terrorist attacks would involve chemical, biological and radioactive weapons. "After the next terrorist attack, there will be calls for fresh legislation, which should be resisted. The criminal law as it stands is enough. We have masses of legislation that deals with terrorism."

She predicted the parliamentary intelligence and security committee, which was heavily criticised recently for its failure to hold MI5 to account, would be turned into a fully-fledged committee in the House of Commons.

• This article was amended on 10 March 2010. The original referred to "cause for fresh legislation". This has been corrected.

