Focus: The tower at Canary Wharf. Was it the target of an al-Qa'ida plot or a cynical exercise in fear-mongering?

The revelation that there had been a plot to fly planes into Britain's tallest office blocks came on the morning of a Queen's Speech introducing tough new measures to fight terror. A coincidence? Or something more sinister?

It was a terrifying image - a flashback of the horror of 11 September - hijacked planes coming out of the sky to smash into Britain's tallest office blocks at Canary Wharf, in London. And the timing could not have been better. The front page of the Daily Mail, and the ITV News bulletins quoted authoritative but anonymous "senior sources" as saying that the latest grim al-Qa'ida conspiracy had only recently been foiled.

It was a terrifying image - a flashback of the horror of 11 September - hijacked planes coming out of the sky to smash into Britain's tallest office blocks at Canary Wharf, in London. And the timing could not have been better. The front page of the Daily Mail, and the ITV News bulletins quoted authoritative but anonymous "senior sources" as saying that the latest grim al-Qa'ida conspiracy had only recently been foiled.

The reports came on Tuesday, the morning of the Queen's Speech, when Tony Blair was due to announce that security was they key component of this year's legislative programme, including another Terrorism and Crime Bill, and the highly contentious Identity Cards Bill, which will be published tomorrow.

It recalled the day in February 2003 when tanks were suddenly deployed around Heathrow to deal with an unspecified terrorist threat four days before more than a million people took to the streets in opposition to the Iraq war.

The timing was so neat, in fact, that it aroused suspicions of a government spin machine at work, creating a climate of fear that would serve as an appropriate background to a Queen's Speech dominated by security matters.

In the Commons the following day, the former Chancellor, Kenneth Clarke, suggested that the entire speech - and by implication, almost everything the Government proposes to do between now and the general election - amounts to one frantic attempt to recover the political damage done to Labour by the Iraq war. He forecast that Labour's election campaign next year would be "a half-baked imitation of the successful presidential campaign by George W Bush".

He added: "The British public are expected to be afraid of terrorism and look to the Labour Party to tackle that domestic problem. The Government hopes that the British people will thus look away from the problems in Iraq and elsewhere, although many of us feel that those problems might be feeding the terrorism that we face."

The suspicion that someone in Westminster had used the Canary Wharf story for political gain has also annoyed people in the security world, who are nervous about any publicity given to anti-terrorist operations, especially by those with a political motive.

"The security forces have been at great pains to avoid scaremongering and then it seems someone in government circles has done exactly that, purely for short-term political gain," one source complained.

However, Mr Blair's spokesman has emphatically denied that the story came from anyone in Downing Street or the Home Office. Peter Hain, the Leader of the Commons, went a step further, telling the office workers of Canary Wharf that they have no need to be afraid. There have been no "specific" terrorists threats at all against Britain since the 11 September atrocity, Mr Hain told Channel 4's Morgan and Platell programme last night.

"If there was a specific threat to Canary Wharf or anywhere else, we would have said so. I know of no specific threat to Canary Wharf and that leak, if it was a leak, did not come from a government minister or, as far as I know, a government source."

Dr Magnus Ranstorp, a terrorism expert from St Andrews University, told The Independent on Sunday that the story probably dated back to the seizure by Pakistani intelligence agents, two years ago, of computers from al-Qa'ida's computer expert, Mohammed Naeem Noor Khan. In it they found information - now at least four years old - about a number of high-profile potential targets, including Canary Wharf. The bigger question is whether Britons can sleep easy in their beds or should be afraid of a major terrorist attack like 11 September or the Madrid train bombing? Because we are, by European standards, very afraid. The Independent on Sunday's poll, published today, shows that 48 per cent of the public do not share the view that the anti-terrorism measures in the Queen's Speech are there only to frighten people into voting Labour. This implies that about half the country believes there is a genuine threat.

A survey of more than 14,000 consumers across 13 European countries conducted online during October by AC Neilsen, the market research company, showed that a quarter of UK respondents listed terrorism as their top concern, compared with a European average of 13 per cent. The survey suggested that the UK leads Europe when it comes to fear of terrorist attack.

These public fears cannot be airily dismissed. After the US and Spain, there is a logical case for believing the UK is the next western country as a terrorist target, as one that sent troops both into Afghanistan and into Iraq. Since 2001, Britain's counter-terrorism experts have identified some 350 locations in the country that would key targets for al-Qa'ida. This included the 15 nuclear power stations, the main national grid sites and oil and petrol installations.

"Without question, there is real threat and the real question is the scale of that threat: whether it would be a big operation or a small operation," Dr Ranstorp said.

Paul Beaver, a defence and security analyst, agrees. "My information is that there have been 12 terror plots that have been thwarted in the UK in the past 12 months," he said, though he emphasised that none was on the scale of flying into Canary Wharf. So the Government's campaign to make people feel secure opens with a fair wind of public support, despite the serious criticisms made of it.

Tomorrow, David Blunkett will publish details of his proposal to introduce a compulsory national identity card scheme, which is billed as an anti-terrorism measure. He may have a struggle to convince intelligent critics that a determined al-Qa'ida cell is going to be put off by legislation requiring them to hold ID cards - or indeed to calm fears that the whole scheme will collapse in another computer foul-up like the one which virtually brought the Department for Works and Pensions to a halt last week.

Despite these reservations, Labour's polling shows the measure is very popular with white working-class Labour voters.

The Home Office is also working on an Anti-Terrorist Bill, which is likely to be published in time to form part of Labour's election manifesto. One of its measures will likely grant Mr Blunkett another year's extension of the powers that allow him to lock up foreign terrorist suspects indefinitely, without trial.

The fate of the 11 suspects in Belmarsh Prison was raised yesterday by the United Nations committee on torture, which has urged Mr Blunkett to find an alternative to keeping the men locked up. But again, whatever the UN or ights campaigners say about the highly questionable treatment of the Belmarsh detainees, their fate is not likely to turn into a vote loser.