Britain will consider severing its intelligence-sharing agreement with Israel if Mossad agents are proved to have stolen the identities of British passport holders, The Daily Telegraph has learnt.
Ministers are understood to be furious that an alleged hit squad which murdered a Hamas leader in Dubai last month cloned the passports of six unsuspecting Britons, who are now living in fear of reprisals.
Israel, which has not denied involvement in the murder, had previously promised that Mossad, its secret intelligence service, would never use British passports to help its agents carry out covert operations
Israel's ambassador to the UK was summoned to the Foreign Office to give his explanation as the diplomatic row intensified.
Ron Prosor will meet Sir Peter Ricketts, the permanent under secretary at the Foreign Office, on Thursday where the ambassador is expected to be asked whether Israel played any part in assassination.
Gordon Brown, making his first public comments about the incident, promised a full investigation into the passport forgery.
Mossad has been accused by Hamas, the Islamist group that controls Gaza, of being behind the murder of its military commander Mahmoud al-Mabhouh, who was found dead in his hotel room in Dubai on Jan 20.
All of the British passport holders whose identities were stolen live in Israel, meaning Mossad would have had ready access to copies of their travel documents.
A senior Foreign Office source told The Daily Telegraph: If the Israelis were responsible for the assassination in Dubai, they are seriously jeopardising the important intelligence-sharing arrangement that currently exists between Britain and Israel.
If it transpires that Israel has been using British passports to assassinate its opponents, the British government will need to give serious consideration to any future cooperation.
Britain has cut ties with Mossad in the past, and will do so again if the Israelis are found to be acting against British interests.
Britains relationship with the Israeli security service reached an all-time low in 1986, when the then Prime Minister Margaret Thatcher closed down Mossads UK operation in response to a series of incidents including the discovery of a bag of forged British passports which had been lost by a Mossad agent.
Mossad was only allowed to re-establish its presence in the UK after it promised not to abuse British passports in the future.
Its intelligence-sharing relationship with the security services over such sensitive issues as Iran is now more important than ever, but the Foreign Office source said: In the past Israel has had a reputation for making life difficult for its friends. It is sincerely to be hoped that this is not the case in this instance.
Several of the six Britons whose identities were stolen have spoken of their shock at being accused of murder, and of their fears that they could be in danger if Mossad did carry out the assassination.
Sir Menzies Campbell, the former Liberal Democrat leader, said: If the Israeli government was party to behaviour of this kind it would be a serious violation of trust between nations. If legitimate British passport holders were put at risk it would be a disgrace.
Given the current speculation, the Israeli government has some explaining to do and the ambassador should be summoned to the Foreign Office to do so in double-quick time.
The Labour MP Mike Gapes, who is chairman of the foreign affairs select committee, said the cloning of passports raised a big concern and agreed that the ambassador should be asked for an explanation, while Hugo Swire MP, chairman of the Conservative Middle East Council, said: This is not something that can just be swept under the carpet
you cannot conduct foreign policy at this extremely sensitive time by this sort of illegal behaviour.
William Hague, the shadow foreign secretary, wrote to David Miliband, the Foreign Secretary, urging him to establish the facts as rapidly as possible to prevent further such abuses from happening.
Israels foreign minister Avigdor Lieberman said there was no reason to think it was Mossad which carried out the alleged hit, but refused to issue a denial.
He said Israel had a policy of ambiguity on intelligence matters, and never confirms and never denies involvement in operations.
He added: I think Britain recognises that Israel is a responsible country and that our security activity is conducted according to very clear, cautious and responsible rules of the game. Therefore we have no cause for concern.
The Serious and Organised Crime Agency, which has a unit based at the British Embassy in Dubai, has begun its own investigation into the identity thefts, and the Prime Minister stressed the importance of protecting the status of the British passport.
We have got to carry out a full investigation into this, said Mr Brown. The British passport is an important document that has got to be held with care. A British passport is an important part of being British.
The evidence has got to be assembled about what has actually happened and how it happened and why it happened and it is necessary for us to accumulate that evidence before we can make statements.
British threat to Israel over Dubai Hamas assassination - Telegraph