An extra £130 million is to be ploughed into the security services to help identify lone wolf terrorists, the Prime Minister has announced as he said there were "lessons to be learned" after the killing of Fusilier Lee Rigby.

In a statement to MPs after the publication of the Intelligence and Security Committee (ISC) report, Mr Cameron vowed to take steps to try to ensure the police, MI5 and MI6 can successfully fight back against plots.

The Prime Minister outlined parts of new legislation, set to be introduced to Parliament tomorrow, which will include relocation powers and procedures to strip passports from people trying to travel into war zones.

Labour leader Ed Miliband endorsed Mr Cameron's response, questioning the Prime Minister on how the different agencies can improve the way they work together.

Mr Cameron said: "The Chancellor will make an additional £130 million available over the next two years including new funding to enhance our ability to monitor and disrupt these self-starting terrorists."

Universities, schools, councils and prisons will come under a "clear legal obligation" as result of the new law to "play their part in tackling this poisonous extremism", Mr Cameron said.

Part of the new money will be spent on schemes to prevent radicalisation, Mr Cameron told the Commons.

The Prime Minister told MPs that, at any one time, there were several thousand "subjects of interest" being looked at by the security services, ranging from those detailed in specific intelligence to individuals.

He said Michael Adebolajo and Michael Adebowale had both been known to the security services for some time, with the former the subject of five investigations since 2008.

Mr Cameron said: "This Government has protected budgets for counter-terrorism and the security services have been clear with me that they have always had the resources they need.

"But the increasing threat we face, including from these so-called 'self-starting' terrorists, means that we should now go further in strengthening our capabilities."

Mr Cameron said tomorrow's new Bill would do more to tackle people travelling to fight in Iraq and Syria, adding that he hoped it could be passed with cross-party support.

He said: "Tackling foreign fighters is an absolute priority for our agencies and, to be fair to the agencies and the police, in the case of Michael Adebolajo he was arrested on his return from Kenya to the United Kingdom.

"Their operational effort has been stepped up, with more than 120 arrests this year for Syria-related offences compared to just 27 in the whole of 2013.

"The committee is right to ask whether we need to give our agencies stronger powers to tackle extremists so our counter-terrorism and security Bill being introduced tomorrow will include essential new powers to seize passports to prevent travel, to stop suspects returning unless they do so on our terms, and to relocate suspected terrorists to other parts of the country and away from their extremist networks."

The Prime Minister said a full response to all the recommendations would be made in the new year.

And he added: "We will not shrink from doing what is necessary to keep our people safe.

"The terrorist threat we face cannot be ignored or contained - we have to confront it.

"We have to equip our security services with the powers and the information they need to track down these terrorists and stop them attacking our people.

"And we have to confront the extremist ideology that drives this terrorism by defeating the ideas that warp so many young minds."

Mr Miliband said: "The context for this report is the security services and police play a vital role in keeping us safe, often in incredibly challenging circumstances, doing a very difficult job of seeking to identify those who pose a risk to our country.

"While perpetrators of terror only need to succeed once to further and achieve their vile aims, our agencies and others need to be successful every time to keep us secure.

"Insofar as there are criticisms in the ISC's report, they need to be understood in this light."

The Labour leader added: "I welcome the announcement of additional resources ... Can you tell us what you believe is required beyond additional resources to get to a better strategy for dealing with those like Adebolajo who are recurring subjects of interest on the periphery of investigations which the report chronicles in some detail?

"In addition, the report points to at times a lack of co-ordination between the agencies and the police. Can you further outline the steps that will be put in place to strengthen that working relationship between different agencies - MI5, SIS, GCHQ and the police?"

Mr Miliband welcomed the reinstatement of relocation powers, which were originally introduced as part of Labour's control orders but scrapped by the Coalition, and pledged the Opposition would work constructively on the Bill.

But he added that there was a clear difference between having the powers available and the way they were used by the security agencies.

Mr Miliband said: "Can you assure us there will be a more rigorous and systematic approach to dealing with returning foreign fighters in the future as the report recommends, including the issue as we have raised before of mandatory referrals to de-radicalisation programmes which can play a role?"

He warned that the money spent on Prevent programmes has "dropped alarmingly" in the last few years.

mfl Page 4: 13:46 Mr Cameron replied: "You said it was right about the increased results; these are modest additional resources but it is worth making the point the funding for security and intelligence services increased in cash terms by 5% compared to 2010.

"They have had, compared to other departments, a very good settlement, that's right and that's continued.

"As well as resources, you said it was necessary to learn the lessons about more rapid decision-making and better triaging of cases, particularly when they appear on the fringes of more than one investigation.

"MI5 have said something about that in their response today and I think we will hear more about that next year.

"In terms of co-ordination between agencies and police, they now say they are confident they have better systems in place."

Mr Cameron said Prevent referrals were looked at on a case-by-case basis, adding that it should be considered in every case but that it had not been in this case.

Former Liberal Democrat leader Sir Menzies Campbell asked whether the £130 million boost would be adequate to meet the "unprecedented" and changing challenges faced by the security services.

Mr Cameron said the situation would be kept under permanent review.

Former communities secretary Hazel Blears said it was important to try to block the "pipeline" of those being drawn into extremism and urged the prime minister to make the Prevent programme a priority.

Speaking in the Commons debate, she said: "If you can stop the pipeline of people being drawn into extremist behaviour, then it is money extremely well spent.

"I believe because it [Prevent] has been seen as something of a soft end to the counter-terrorism strategy, it is a cultural issue and hasn't had priority.

"I welcome the home secretary's commitment to new legal powers, I welcome the prime minister's commitment to further resources. But we have got to change the perspective.

"Because the threat we face now with 500 people out in Syria and Iraq, 250 of them coming back, some of them radicalised and well trained, this is a different scenario.

"I think the Prevent programme has to no longer be the soft and fluffy end of community engagement ... but a hard, targeted counter-ideology, a counter-narrative that stops people creating a climate for extremism."

Mr Cameron insisted Prevent was not a "soft and fluffy" programme but a "tough and robust" one.

He added: "It will become more robust because additional funding has been secured. It will become more robust because we are putting it on a statutory footing.

"I don't think anyone should underestimate the importance of putting this legal duty on all these organisations."

Keith Vaz, chairman of the Home Affairs Select Committee, asked whether the prime minister was saying that from now on where a British citizen commits an offence in another country, the Government will not seek their return until the criminal processes are completed.

Mr Cameron stressed the Government was not starting from scratch but identifying gaps and making sure they are filled in. He added: "The power we are taking in the new legislation is to make sure people can only come back on our terms.

"That is the key so we can make sure if they are to be prosecuted, we are ready to prosecute. If they are going to be subject to a TPim, they should be subject to a TPim."

Democratic Unionist MP for Belfast North Nigel Dodds said he was concerned to ensure that the Northern Irish situation is not forgotten amid the increased focus on Islamic extremism.

He told the House: "As well as the threat from returning jihadists and Islamist terrorism, we still have the severe terrorist problem in Northern Ireland with dissident republicans which could spread to the UK mainland."

Mr Cameron replied: "Just because there is a growing terrorist threat from citizens of our own country and from people being radicalised in Iraq and Syria, doesn't mean in any way we have taken our eye off the ball of Northern Ireland terrorism."

Labour's David Winnick (Walsall North) warned the prime minister that the new measures should not be counter-productive as he suggested had happened in the past in relation to the IRA.

Mr Cameron agreed that the UK would never defeat terrorism by undermining the freedoms its advocates wish to attack.

But he went on: "I think what successive Governments have found is that simply standing back and saying we will just use the traditional criminal justice system of investigation, prosecution and imprisonment, that is not enough."