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During the state opening of Parliament on Wednesday, the Queen said: "My government is determined to combat terrorism.
"A bill will be introduced to modernise and make permanent the powers available to respond to all forms of terrorism."
Terrorism home and abroad
The bill, scheduled to appear before Parliament over the coming year, is likely to chart new territory and move into what ministers are calling 'domestic' terrorism.
As well as covering Northern Ireland and international threats the bill will act against people who use violence to advance a political or religious cause.
The new law could include action against such groups as animal rights activists who may use violence as a means of making their case.
Current powers on stop and search would be retained while new powers to seize the assets of terrorists will be brought in.
Different rights
Reacting to the new proposals the director of the civil rights group Liberty, John Wadham, said: "Committing violence to others to prevent harm to animals or to stop the building of a road is not justified in my opinion.
"But I cannot see the logic of a system that assumes that those suspected of such offences should have fewer rights than those who commit crimes for greed or in anger."
In addition powers, now in the hands of the Home Secretary Jack Straw, to extend the detention of those held by police as terrorist are to be transferred to judges.
The Prevention of Terrorism Bill follows a consultation paper, Legislation Against Terrorism, set out by the government in 1998.
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