The agent who came up with the plan says that he was cut off by the British security services after he took the idea to the CIA.
He was told that the British were no longer allowed to work with him because they were not allowed to get involved in assassinations.
The terrorist Anwar al-Awlaki, who was later killed by the Americans, was pumping out propaganda calling for attacks on the West and actively recruiting young Muslims to launch such attacks.
The revelations have been made by Morten Storm, the first British agent to go public since 9/11, who has spoken to the Daily Telegraph.
Storm, the former leader of a motorbike gang in Denmark, lived in Britain on and off for 15 years, first as an extremist using the name “Murad”, then as an agent using an outdoor pursuits company as cover.