London - A secret British Cabinet memo admits that Britain's military action in Iraq is fuelling terrorism in Britain, the Sunday Telegraph reported.

The classified Cabinet document written by senior Cabinet officials has blown apart Prime Minister Tony Blair's claim that there is no link between Britain's foreign policy and terrorist attacks in Britain, the paper reported.

The memo, circulated in recent weeks to ministers and security chiefs, says that everything Britain does overseas for the next decade must have the ultimate aim of reducing "terror activity, especially that in or directed against the UK," the paper said.

The memo admits that, in an ideal world, "the Muslim would not perceive the UK and its foreign policies as hostile" - effectively accepting the argument that Britain's military action in Iraq has served as a recruiting sergeant for terrorist groups, it said.
Publicly, Blair has resisted this argument fiercely. During his final speech as leader to Labor's annual conference last month, he described such claims as "enemy propaganda."

But the memo leaves no doubt that all foreign policy must be driven by the goal of thwarting terrorism in Britain. It demands a "significant reduction in the number and intensity of the regional conflicts that fuel terror activity," the paper said.