New laws on freedom of speech could result in a "backlash" from "alienated" Muslims, an independent review of the UK's terror legislation has warned.

David Anderson QC, the independent reviewer of terrorism legislation, said the components of the forthcoming Counter-Extremism Bill would place limits on "some of our most basic freedoms" which could trigger a negative reaction from terror groups.

In his fifth annual review today, Mr Anderson said: "If the wrong decisions are taken, the new law risks provoking a backlash in affected communities, hardening perceptions of an illiberal or Islamophobic approach, alienating those whose integration into British society is already fragile and playing into the hands of those who, by peddling a grievance agenda, seek to drive people further towards extremism and terrorism."

Full details of the Counter-Extremism Bill have not been made public. However, they are expected to include tough new clampdowns on extremist organisations who use hate speech in public places, and new powers for Ofcom to take action against outlets which broadcast extremist content.

Mr Anderson's review was published on the day Andrew Parker, the head of MI5, warned that new technologies were posing ever-greater challenges to his agency.

In his report, Mr Anderson cited the volume and accessibility of extremist propaganda on the internet by the likes of Islamic State (IS) - some of it, he said, in the form of "slickly produced films" - had increased.

He said: "UK-based extremists are able to talk directly to (IS) fighters and their wives in web forums and on social media.

"The key risk is that this propaganda is able to inspire individuals to undertake attacks without ever travelling to Syria or Iraq. Through these media outputs, (terrorists have) inspired the increase in unsophisticated but potentially deadly attack methodologies."

A Downing Street spokesman said he had not seen the report, but added: "The key point about the counter-terrorism strategy that the Prime Minister has set out is the need to really tackle the threat of radicalisation and prevent individuals being drawn into terrorism, wherever that happens.

"That's very much the purpose of the Prevent programme (the Government's dedicated counter-extremism strategy) that we have set out."

A Home Office spokesman said: "The current threat from terrorism presents one of the greatest challenges to the UK's peace and security and protecting the public is our primary duty. We remain committed to ensuring that our counter-terrorism laws are fair, effective and proportionate in the face of this threat.

"We welcome David Anderson QC's latest annual report, which demonstrates the importance of independent and detailed analysis into how legislation operates in practice. We will consider his recommendations in detail and will respond in due course."