David Blunkett, the home secretary, on Sunday signalled the government's readiness to introduce compulsory identity cards and press ahead with tough anti- terrorism laws in spite of doubts by MI5, the security service, about the need for new measures.

The home secretary also upset the civil liberties lobby by suggesting the Human Rights Act, introduced three years ago, may be amended to allow the legislation to go ahead.

Mr Blunkett said that there would be no "snap announcement" on ID cards but he was giving it "a fairly high priority in terms of discussions behind the scenes".

He dismissed the idea - floated before the September 11 outrages in the US - of voluntary cards, as "not a great deal of help".

Mr Blunkett told the BBC his "instincts" were that beating terrorism must have priority and that politicians' ability to act should not be impeded by too legalistic an approach to human rights.

He said provisions of the European Convention on Human Rights, incorporated into the Human Rights Act, had proved "difficult to deal with in the current circumstances". The measures might involve more than one bill during the current parliamentary session, which ended in November next year.

Mr Blunkett said they would involve mutual recognition of European Union member countries' judicial and policing systems, and "make sure people who are a risk to us are dealt with decisively and that includes those who may be trying to enter the country".

Whitehall sources said that new counter-terrorist measures could help to control illegal immigration, easing political tensions over asylum seekers and refugees.

The legislation is likely to include EU-wide arrest warrants, fast-track extradition of suspects and freer information exchange.

The government may also amend the proceeds of crime bill to require banks to report activity in accounts the police suspect of being involved in terrorism.

The Home Office would not comment on suggested powers for police to arrest people solely for interrogation about their knowledge of terrorism, and the abolition of some rights of judicial appeal for immigrants turned back at airports.

The former could conflict with the convention, which says arrests should be limited to people who have committed offences, or when it is necessary to prevent them from committing offences or from fleeing afterwards.

MI5 officials say they have not pressed for additional powers, nor have they been consulted on proposed government moves.

The security services believe existing powers have allowed them to monitor and disseminate intelligence about suspected terrorists in a way that does not fall foul of the Human Rights Act.

Some police investigators feel, however, that efforts to track terrorist funding could be helped by tighter that laws force disclosure and allow access to accounts, as exist in Northern Ireland and the Irish Republic.