By Gordon Corera
Security correspondent, BBC News
The current system of threat levels is supposed to be secret. But details of changes have frequently leaked out, including the lowering of the threat level from "severe general" to "substantial" shortly before last July's bombing.
The policy change was influence by the 7 July London bombings
This has led to public confusion over what the system is and how it works. The new system will be publicly available on the websites of MI5 and the Home Office and also much simpler.
The number of threat levels is being reduced from seven to five.
"If it moves to critical, you should worry," commented a senior Whitehall source.
There will also be three response levels linked to the threat levels which will dictate the kinds of security measures that government buildings or parts of the economy or infrastructure should take.
"Normal" will cover the low and moderate threat levels, "heightened" will cover the substantial and severe levels and "exceptional", the critical threat level.
Having a national threat level will not preclude security being tightened in certain areas or certain parts of the infrastructure if there is intelligence of a specific threat.
So for instance, the transport infrastructure in Manchester could have its response level raised to exceptional based on specific intelligence even if the national threat level doesn't move.
The specific intelligence on which the threat level will be based will remain secret - although any move in the level is bound to cause speculation.
Also, the exact nature of the government's response will also remain secret so as not to tip-off terrorists.
The new system will come into force on 1 August. The expectation is that the level will be initially set at severe and is likely to stay there for some time.
"It's always easier to put them up than put them down," said one former counter-terrorist official.
NEW THREAT LEVELS
Low - an attack is unlikely
Moderate - an attack is possible but not likely
Substantial - strong possibility of an attack
Severe - an attack is highly likely
Critical - an attack is expected imminently
France has a similar system called Vigipirate based around four colour-coded levels, but the other parallel is the system run by the US Department of Homeland Security, established soon after the 11 September attacks.
There is some concern about going too far down the US model of public threat levels.
In the US, a series of yo-yo moves of the level announced by officials led to queries over whether the system was becoming politicised and used by politicians to suit their own agendas.
British officials are quick to point out that in the UK, the level will be set by professionals within the Joint Terrorism Analysis Centre, housed within MI5 and completely insulated from political influence.
Experts who have worked in the field say there needs to be a strong distinction between the reasons for communicating with the public about terrorism.
Firstly, there is the need to have an informed public by letting people know about the general level of danger and shifts in its severity.
In recent months many of the detailed aspects of counter-terrorism policy have already become highly controversial
Secondly, there is the need to warn specific institutions, sectors and places about a threat so they can take action, for instance if there is a concern over aviation then the industry needs to be informed so it can put in place its own counter-measures.
Finally, there's a need to alert the public by issuing specific warnings when specific intelligence requires people to change their behaviour.
This can apply at home as well as abroad, in the form of advice not to travel to a particular country if there is known to be a specific threat.
The danger, according to experts, is confusing the different types of information and leaving people unsure how they are supposed to actually respond.
The government is also putting more information about its over-arching counter-terrorist strategy, called Contest, into the public domain.
Contest is based around the "four Ps" - preventing terrorism by tackling its underlying causes, pursuing terrorists and those who sponsor them, protecting the UK public and interests, and preparing for the consequences of any attack.
The strategy has been in place since 2003, but Whitehall officials say that since 7 July they've realised they need to focus more on the first P - preventing radicalisation and understanding why people become terrorists.
This clearly involves addressing the role of UK foreign policy.
Government officials stress that there is no possibility of allowing any section of the community to dictate foreign policy but that there is the need to explain better the broader context of policy beyond just Iraq and show the positive aspects of UK foreign policy, including to the Muslim world.
The government's hope is that by putting more information into the public domain - whether about the overall strategy or about the threat levels - it can stimulate a more informed debate on terrorism.
But in recent months many of the detailed aspects of counter-terrorism policy have already become highly controversial.
For instance, how far the government is listening to Muslim communities, how good its intelligence really is on the threat and what kind of policies and tactics are required or justified to counter that threat - which means that the debate is already well underway.