Crispin Black: Back to the paperwork, 007

'At risk' parts of our cities will be gently cloaked in a blanket of surveillance

"I wish life were like Spooks where everything is, a) knowable, and, b) solvable by six people" was the most memorable line in Dame Eliza Manningham-Buller's recent invitation-only address to graduate students at London University. Her wistfulness is understandable. But the real problem is not that the director general of MI5 would rather be in an episode of Spooks - or a Bond film - but that our political leadership think they really are. Spooks ignores the administrative side of intelligence work - the drudgery of surveillance and checking car number plates, tedious old-fashioned things like borders. The politicians far prefer the big picture - the nuclear threat, the quivering lip, the apocalypse which allows them to posture rather than the administrative grind.

Dame Eliza set out to alarm. Her assessment wasn't "dodgy" but it had been authorised by the Home Secretary John Reid - in other words it was more a political rather than an intelligence statement. No one disputes that we have a serious problem with Islamist terrorism but she was pessimistic in the extreme. Analysts should of course consider the worst case, but we should remember that this often the least likely scenario - frighteningly possible but rarely probable. And now is not the time for despair. Far from it. More and more is becoming knowable about terrorists, and the poisoned and tense background to counter terror is changing. There are two imminent developments that will deliver immediate improvements.

We will experience in the next year or so a peace, or rather defeat dividend in Iraq. Withdrawal will not solve the problem but it should draw some of the sting and resonance from the propaganda of extremism. The Iraq war package (the fiasco and the lies) has been to Islamist terror in the United Kingdom as Prohibition was to the 1920s Mafia in the United States. Our intervention in Iraq, more than any other issue, has given the terrorist recruiters a golden opportunity to get a foothold in the mainstream. A retreat from Iraq should help to cool tempers and improve the atmosphere within British Muslim homes where there has been genuine distress and outrage. This will make the young less susceptible to extremist propaganda.

The retreat from Iraq should also help knowability. Reducing our massive intelligence effort there should allow the agencies and analytical branches to focus more on the homeland. Many of the surveillance people belonging to the Special Reconnaissance Regiment of the Special Forces Group will probably be redeployed in the UK. Their predominantly urban surveillance skills will be less required in Afghanistan. This should give the security service and police more eyes, ears and expertise on the ground.

In any case, knowability about terrorists is becoming easier all the time. The internet may be a grand forum for radicalisation but computers do tell tales, as child pornographers have found to their cost. Is a community or student leader a closet Islamist extremist? Look at the hard drives on their computers. As our intelligence assets continue to gear up, the "at risk" parts of our cities will find themselves gently cloaked in a blanket of surveillance. GCHQ, our eavesdropping agency, has been busy. Parts of London and some of our northern cities are set to become like West Belfast without the troops on the streets. Not much will go on in these areas that the authorities won't know about. The authorities enjoy an additional advantage in that most of these districts are not no-go areas - the technical kit and the people will not need armed protection as in Ulster.

The segregation of some British Muslims may have presented terrorist recruiters with the ideal incubation grounds for extremism. Segregated areas also provide the ideal target for surveillance. Tracking down Islamist extremists has never been like looking for a needle in a haystack. It will become even less so now.

The recently convicted Islamist terrorist Dhiren Barot's long journey by car to Swansea so that he could make telephone calls and send emails away from possible surveillance will soon become much more difficult to pull off without exciting suspicion. From the early 1980s, for instance, it became extremely difficult for IRA terrorists to move by vehicle around Northern Ireland because of the "Vengeful" computer system. It was crude enough and required number plates to be input manually but it alarmed effectively if anything about a particular vehicle did not match up. Imagine what we can do now with all the cameras and computer technology at our disposal. A modern version of this kind of system will impose huge burdens on the terror groups if they are to remain effective and make getting a plot off the ground a lengthier and more fraught activity, more liable to disruption or discovery.

We do not know whether a Home Office spin doctor or Dame Eliza herself drafted her most chilling line that terrorists will seek nuclear technology at some point - that would certainly make a fine plot line for an episode of Spooks. But back in the real world bringing Islamist terrorism under control will be better served by Home Office officials less keen to please their political masters and more energetic in sound administration. The key to curbing Islamist terror lies not in the big picture or mimicking the small screen - but in co-ordinated administrative, legal and intelligence action. Modern state bureaucracies have considerable, some would say irksome, power over their citizens. That makes terrorists living within our midst vulnerable. From regulating international travel, to welfare payments, to controlling access to our universities, the state is well positioned to squeeze and restrict the space and sympathy which terrorists need to survive. As a demonstration of the Home Office's commitment to fighting terror on all fronts it might spend less time trying to frighten us all and more time on more modest and achievable aims - such as making sure that there are no Islamist extremists working at its own Immigration and Nationality Department.

Crispin Black is a former government intelligence analyst and author of '7-7: What Went Wrong'