The Crown Prosecution Service (CPS) is studying a file on controversial preacher Abu Hamza.
Muslim cleric Abu Hamza still preaches in north London
Solicitor General Harriet Harman told MPs after a ban on discussing Abu Hamza's case in the Commons was lifted.
The Daily Mail has published quotes from tapes which the paper alleges the cleric secretly recorded for his most loyal followers.
After hearing the tapes, Scotland Yard said it was trying "to establish whether a crime has been committed".
The cleric still preaches outside the Finsbury Park mosque in north London, from which he is banned.
He has sparked outrage with his sermons castigating the UK and the invasion of Iraq as a "war against Islam", but he has publicly denied any involvement in terrorism.
MPs had been told they could not discuss him because it may prejudice his on-going deportation hearing.
But Andrew Dismore, Labour MP for Hendon, complained on Tuesday that it effectively "gagged" MPs for another nine months.
After the Speaker lifted the ban on Thursday, Ms Harman told the Commons that the police and the CPS were working to see whether Hamza could be prosecuted but refused to say any more.
A CPS spokesman said: "We have received a file from the police. We are reviewing it.
"The police are asking us to review material to see if we can give them advice on what action to take."
Following the publication of the Daily Mail's tapes, Scotland Yard said: "On receipt of the tapes, the Metropolitan Police will work closely with the CPS to establish whether a crime has been committed.
"We will seek legal advice on what course of action is appropriate."
The government wants to withdraw Abu Hamza's UK citizenship, but an appeal hearing has been adjourned until next January.