Strict surveillance to replace current system

The house arrest of terror suspects will be scrapped and replaced with more rigorous surveillance in an overhaul of the control order system, starting next week. Home curfews, restraints on travel within Britain and limitations on contact with other people would be abandoned. Curbs on access to mobile phones and computers would be eased.

But suspects would still face restrictions on their liberty, possibly including electronic tagging and being subject to more intensive monitoring by police and security services.

The changes are the result of months of wrangling between the Coalition parties over the future of the control-order regime introduced by Labour in 2005. The Liberal Democrats were committed to abolishing control orders, while the Conservative Home Secretary Theresa May – backed by the security services – insisted that tough restrictions on suspects should remain because those subject to the orders posed a real threat to the country.

The compromise is designed to reassure Liberal Democrats, whose leadership will be able to claim they have achieved the pledge in their election manifesto to end house arrest for suspected terrorists.

But David Cameron and Nick Clegg will deny that the new policy is a political fix, insisting that the security of the nation is the top priority. Insiders say there is no row between the Coalition partners, adding that many Tories share the Liberal Democrats' reservations about the way the system introduced by Labour is working.

But the Government's decision will be attacked by civil liberties groups as a "rebranding exercise" that allows freedoms to be eroded without suspects facing trial. Kate Allen, the director of Amnesty International UK, said: "Control orders are fundamentally unfair. They're usually imposed on the basis of secret evidence and essentially punish people without giving them a fair trial.

"They have been criticised by politicians of all parties because they undermine the rule of law and the basic right to a fair trial. They should be scrapped on constitutional, not political grounds."

Ed Balls, the shadow Home Secretary, said the future of control orders had become a "political tussle about keeping the Coalition together". He added: "Experts I've spoken to from the security services and the police are very unconvinced that it is possible to keep our country safe without some kind of successor regime to control orders, and that is not consistent with the Liberal Democrat manifesto."

A poll for Liberty last night found that 46 per cent of people wanted control orders scrapped and replaced with a system of intensive surveillance with a view to prosecution, against 40 per cent who wanted the present system to be retained. The Law Society called for control orders to be replaced by "surveillance and trial".