By JASON LEWIS

Last updated at 08:46 01 July 2007

• Mercedes terrorists were 'off the radar'



• Police hunt for Iraqis on the run



• CCTV footage may be unclear





MI5 fear the gang behind the attempt to set off car bombs in London's West End are an "off-the-radar" cell with no previous links to terrorism.

They are concerned that the gang, now at the centre of a massive international manhunt, have evaded the anti-terror net which has foiled every plot in Britain since the July 7 London bombings in 2005.

On Friday, two cars laden with petrol and gas were discovered in adjacent streets, apparently primed to cause mass devastation.

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Police and forensic teams were painstakingly dismantling the cars, looking for anything that might led them to the terrorists.

But Whitehall sources voiced concern that MI5 had no warning of an imminent attack. The Security Service fear their lack of intelligence points to an unknown 'cleanskin' home-grown group or an international terrorist cell allowed to slip into Britain from abroad.

The discovery of an "off-the-radar" cell would call into question Britain's entire anti-terrorist strategy, which has seen millions of pounds of extra cash spent on internal security and a massive expansion of MI5's manpower.

Despite huge amounts of information on potential terror plots being sifted by MI5, sources say they picked up no warning of the plan to plant devices in two Mercedes cars, one of which was left directly outside a busy nightclub.

The cars, packed with nails, petrol and gas cylinders, failed to explode. But despite having 1,600 terror suspects under investigation nationwide, only chance averted a tragedy.

The first bomb was discovered after ambulancemen attending to an injured late-night reveller spotted smoke or gas vapour pouring from a parked car. A second device, left in another Mercedes parked in an adjacent street, was found only after the car was towed to a police pound because it had been parked illegally.

US sources claimed the bombs failed to go off despite repeated calls to mobile phones rigged to trigger the devices.

Senior Scotland Yard sources said the two cars contained a "gold mine" of evidence that could provide vital clues from DNA and fingerprint evidence. Sources said the vehicles provided the best hope of tracking the bombers.

The frantic activity came amid reports from US law-enforcement officials which claimed that British police had a "crystal-clear" image of the man who drove the Mercedes towards the Tiger Tiger nightclub in Haymarket.

The officials, quoted by ABC News, claimed the man bore a "close resemblance" to an associate of terrorist mastermind Dhiren Barot, who was jailed for life in Britain last November.

But British investigators insist they are still desperately trying to clean up the CCTV footage from the cameras, which they hope will show one of the bombers parking his car. They say the raw footage is "what you would expect from a camera monitoring a street at night, with faces far from distinct".

One of Barot's plans was to park limousines packed with gas canisters under high-profile buildings. But the British sources said while there were some similarities between the Barot plot and this failed attack, there was "nothing else to link them at this stage".

Whitehall sources admitted they feared the individuals behind the attack might be the nightmare scenario - genuine "cleanskins".

"If there is no trace then this means the terrorism situation in the UK is much worse than we have believed and everything we have been doing - the expansion of MI5 - will have to be reassessed," said a highly placed source. The British sources also revealed that one theory was the terrorists may have been sent from abroad to launch the latest attacks.

Police were still hunting an Iraqi, suspected of plotting similar attacks, who went on the run on June 18 while under a British control order restricting his movements.

The man, who cannot be named for legal reasons, is part of a six-man cell linked to Al Qaeda in Iraq and went missing from his home near Manchester.

He was the second of his group to abscond from a control order. Last August, Bestun Salim also absconded. Security officials now believe he has left Britain. The six Iraqis had been living under control orders since autumn 2005. They were arrested after an MI5-led surveillance operation.

Whitehall sources have claimed they were in the final stages of planning attacks, possibly involving car bombs. Instead of charging the men in open court and exposing sensitive intelligence, the Government imposed control orders, effectively confining them to their homes for 18 hours a day.