Al-Qaida leaders are promoting 'jihad' from inside the high-security prisons in Britain by smuggling out propaganda for the Internet and finding recruits, a Home Office-funded think tank has claimed.

In an authoritative report, Quilliam, the think tank, said "mismanagement" by the Prison Service is helping Al-Qaida gain recruits and risks "strengthening jihadist movements".

According to the report, Abu Qatada, described by Britain's intelligence agency MI5 as "Osama Bin Laden's right-hand man in Europe" has posted 'fatwas' on the internet from Long Lartin jail, calling for 'jihad' or holy war and the "murder" of moderate Muslims, 'The Times' reported.

Abu Qatada is a radical Islamic cleric wanted on terror charges in Jordan. Like other jailed terrorist leaders, Qatada is meant to be cut off from his supporters outside.

Even during a brief spell of freedom in 2005, a government control order barred him from spreading his incendiary sermons without the permission of the Home Secretary.

Yet last year, under the noses of warders, it is said that Qatada and Adel Abdel Bary, leader of the UK branch of Egyptian 'Islamic Jihad', were able to smuggle out a series of 'fatwas' - religious decrees - legitimising attacks by al-Qaeda. Qatada and Bary are two of about 100 Islamist terrorists in UK prisons.

Many are held in supposedly top-security jails such as Long Lartin, Belmarsh in southeast London, Frankland in Co Durham or Woodhill in Milton Keynes, for inciting or plotting attacks in which hundreds of people could have died.