From: Financial Times

By James Blitz

David Cameron’s government has begun an internal discussion on whether the  UK’s security services need to rebalance their efforts away from  counter-terrorism towards some of the major new threats facing the UK, such as  cyber espionage from China.

The security services – MI5, MI6, GCHQ and the police – have been heavily  focused for years on counter-terrorism and, in particular, preventing an  atrocity at the  Olympics and Paralympics.

With those events now safely passed, ministers and intelligence chiefs are  intensifying talks on whether more effort is needed to tackle emerging risks, in  particular espionage by foreign states.

The prime minister’s national security council discussed the post-Olympics  agenda for the security services on July 3. No firm decisions were taken but  officials said the intelligence agencies were asked to consider whether there  should be a shift in priorities and report back for more talks.

“The issue on ministers’ minds was what the security scene would look like  in, say, 2025,” a Whitehall figure said. “Will we look back and say that, in the  decade after the Olympics, the jihadist threat remained the central security  preoccupation for the UK? Or will the next decade come to be dominated by other  issues, like the return of state-on-state  challenges from Russia and China.”

For Britain’s intelligence community, the conclusion of the Olympics was  always set to mark a watershed. Olympic security has been the dominant  preoccupation of MI5 and MI6 for the past seven years because the event was an  obvious attraction for jihadists plotting a major attack.

The fact that the bomb  attacks in London on July 7 2005 took place one day after Britain was  awarded the games heightened fears that the Olympics were at risk. But no  significant terrorist attack has taken place in the UK since those London  bombings – causing some analysts to argue that the jihadist threat has been  contained.

Within the intelligence world, this view is strongly contested. “While the  games have been a success in security terms, there are still many people  plotting jihadist acts,” an official said. “Core al-Qaeda in Pakistan may have  been decimated but new jihadists groups are emerging in Nigeria, Mali and Syria.  In some way the complexity of jihadist operations is making the challenge  bigger.”

The official added: “Ministers will never want to take any risk in reducing  our commitment to counter-terrorism. They know that a single terrorist incident,  if successful, would do immense damage to Britain’s reputation and  confidence.”

That said, other challenges are emerging. The biggest question is whether  there needs to be more effort to tackle the rise in web-based espionage by  China. As Jonathan  Evans, the head of MI5, suggested in a speech this year, the amount of  hostile activity generated by foreign states in cyber space is “astonishing” and  of “industrial scale.”

A second issue is whether MI6 should focus more on collecting foreign  intelligence on Britain’s economic rivals.

“There may need to be a greater focus on what I would call ‘old fashioned  statecraft,’ collecting intelligence from foreign governments in order to  further Britain’s political and economic interests,” said Nigel Inkster of the  International Institute for Strategic Studies think-tank.

Many commentators note that the Cameron government is committed to putting  promotion of economic interest at the heart of foreign policy.

“It makes no sense to completely unwind the position on counter-terrorism,” Mr Inkster said. “But there are questions of proportion to be discussed. In the  forthcoming spending round, it would certainly make no sense for the agencies to  make a bid for cash, solely based on counter-terrorist activity.”

Michael Clarke, head of the Royal United Services Institute think-tank, made  a similar point. “Now the Olympics is over, funding for the intelligence  services will get tighter,” he said. “This will mean there needs to be far more  discussion about priorities, whether the agencies like it or not.”

That said, the firm view inside MI5 and MI6 is that the counter-terrorism  effort cannot be compromised. “If a bomb goes off in London, the whole  discussion will change,” a Whitehall official said. “The fundamental problem is  that – now the Olympics are over – nobody can be completely sure what the next  big challenge to national security will be.”