Europe's law chief wants Britain to reinstate the payment of tens of thousands of pounds in State handouts to the wives of suspected Al Qaeda and Taliban fanatics. Ministers have halted benefit payouts made to the families of suspected terrorists to prevent the money falling into the hands of banned groups.
The Treasury says the power is a vital weapon in the war against terrorism. It stems from a crackdown on terrorist financing launched in the aftermath of the September 11 attacks.
However, the senior advocate of the European Court of Justice, Paolo Mengozzi, yesterday declared the decision to stop the payments was unfair on the grounds of human rights.
His opinion is likely to prove crucial when Europe's highest court considers three test cases brought by the wives of British-based terror suspects later this year.
In eight out of every ten cases, the court has agreed with the Advocate General - making it highly likely the UK taxpayer will soon begin forking out hundreds of pounds a week to the families.
Whitehall officials have refused to name the families involved in the test cases - but all three of the husbands are foreign nationals on the United Nations list of international terror suspects.
They have been linked by security officials to Al Qaeda, Osama bin Laden and the Taliban
The payouts to their wives include income support, child benefit and housing assistance worth 'several hundred' pounds a week.
Last night, campaign groups said it would be outrageous for the European courts to once again water down Britain's anti-terror laws.
Matthew Elliott, chief executive of the TaxPayers' Alliance, said: 'It is absurd that this unaccountable European court is trying to dictate
to the British Government how we spend our own money. British taxpayers are already sick of bankrolling the lifestyles of people who preach hate against our country, and there is no way that they should be able to fund their activities or their families through milking the welfare system.
'Whether you agree with the judgment or not, it is a choice that should be made by our country, not these lawyers who are answerable to nobody.'
Under the Treasury's rules, social security payments cannot be made available 'directly or indirectly, to, or for the benefit of' anyone who is on the UN terrorism sanctions list.
This has been applied to the wives of as many as ten terror suspects, who have been hit with licences restricting their access to state funds.
In the case due before the EU court, the three women claim this amounts to a violation of their human right to a family life.
Their first appeal was rejected. But in a second appeal to the House of Lords, Britain's highest court, judges had concerns about how the law was being applied.
In April 2008, they asked the European Court of Justice to provide a ruling.
Any decision by the European court, which is expected to issue a final judgment in three to six months, will be binding on the House of Lords and on courts throughout the EU.
In advance of this decision, Mr Mengozzi issued a 26-page written opinion in which he argued the phrase 'directly or indirectly, to, or for the benefit of' suspected terrorists was very widely drawn.
He acknowledged that the payments made to the wives could benefit their husbands, but disputed whether those benefits could easily be converted into funds to finance terrorism.
Mr Mengozzi advised the European Court of Justice to rule that the extra restrictions were unjustified and violated the right to respect for family life.
Earlier this week, the European Court of Human Rights dealt a separate blow to UK anti-terror policy when it ruled the stopping and searching of suspects without grounds for suspicion was unlawful.
The searches had been a key plank of policing for over a decade.
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