Leaked cabinet papers from the British government suggest that British military action in Iraq is fuelling terrorism in the UK. The leaked papers demand a "significant reduction in the number and intensity of the regional conflicts that fuel terror activity".

In future Britain should "aim to reduce terror activity, especially that in or directed against the UK," they add. The Sunday Telegraph says the memo was written by "senior Cabinet officials".

The newspaper says it was put before a Cabinet committee on security earlier this month and was circulated around ministers and security chiefs. Downing Street has said the memo was not written by its officials but refused to comment further on its contents. A spokesman said: "We recognise that people have used Iraq as an excuse for terrorist activity but clearly plenty of terrorist activity against the UK and its citizens has pre-dated that.

According to the Sunday Telegraph the documents say that, in an ideal world, "the Muslim would not perceive the UK and its foreign policies as hostile". The papers then set out a list of perfect scenarios in a series of troublespots - including stability for Iraq and Afghanistan -10 years from now.

As well as Israel living in "peaceful coexistence" with its Arab neighbours and Iran devoid of nuclear weapons, they say that there should be "no new failed states, dictatorships or wars" in the Middle East and South Asia.

"If all or most of the above were in place, threats from other sources of Islamic terrorism (eg Indonesia, Philippines, Nigeria) would be manageable or on the way to resolution," they conclude.

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