The European Union should set up a central intelligence agency, inspired by the US Department for Homeland Security, according to a report compiled by Jean-Claude Juncker’s in-house think tank.

Intelligence agencies should pool their expertise and allow a central EU service to analyse jihadist threats and draw up counter-terrorism plans, the report suggests.

It argues that the 7/7 attacks on London and atrocities in Madrid, Paris and Brussels show the “painful costs” of “institutional fragmentation”.

The suggestion comes despite Germany and Britain firmly rejecting a suggestion by Dimitris Avramopoulos, the EU’s Home Affairs commissioner, in December that a single intelligence agency should be created.

Belgium, whose intelligence agencies have come under intense criticism for failing to stop the Paris cell striking again in Brussels, strongly supports the idea.

Koen Geens, the Justice Minister, last week said it was a matter of “regret” that the “big member states” want to block such a scheme.

Britain is opposed to any central agency because it only shares intelligence with foreign agencies it can trust not to betray sources or undermine operations. The forced sharing of material across 28 states would result in less, rather than more, co-operation, it is argued.