Hamza defied order freezing assets by passing flat to son

Abu Hamza defied a Treasury order freezing his assets and transferred his £220,000 flat to his son, it emerged today.

Mohammed Kamel Mostafa was handed the property in Hammersmith, west London, while his father was under police investigation.

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• Security blunder led to Hamza's terrorist son working on underground

Senior police sources said Mostafa - Hamza's eldest son - should have been the subject of an asset-freezing order.

Hamza sold his former council flat in Hammersmith in September 2004 for £228,000 and a bought a four-bedroom house in Greenford, west London, for £220,000 while in Belmarsh prison.

The race hate preacher's accounts had been frozen by the Treasury in 2002 after a request from the United Nations sanctions committee, which had accused him of helping to support terrorism.

Ed Balls, Chief Secretary to the Treasury, claims the Government was powerless to prevent Hamza exploiting a loophole by passing the property to his eldest son.

Because Hamza received no money in the house transfer three years ago, no criminal offence under anti-terror orders had been committed - leaving the authorities powerless to act.

In a leaked letter, Mr Balls wrote: "At all times our regime acted to prevent the risk of funds being diverted to terrorism."

Theresa Villiers, shadow secretary to the Treasury, described the revelation as 'scandalous'.