Dame Stella Rimington, the former head of MI5, has warned that the fear of terrorism is being exploited by the Government to erode civil liberties and risks creating a police state.

Dame Stella accused ministers of interfering with people's privacy and playing straight into the hands of terrorists.

"Since I have retired I feel more at liberty to be against certain decisions of the Government, especially the attempt to pass laws which interfere with people's privacy," Dame Stella said in an interview with a Spanish newspaper.

"It would be better that the Government recognised that there are risks, rather than frightening people in order to be able to pass laws which restrict civil liberties, precisely one of the objects of terrorism: that we live in fear and under a police state," she said.

Dame Stella, 73, added: "The US has gone too far with Guantánamo and the tortures. MI5 does not do that. Furthermore it has achieved the opposite effect: there are more and more suicide terrorists finding a greater justification." She said the British secret services were "no angels" but insisted they did not kill people.