According to yesterday's Times:

Britain's top spies knew that the ringleader of the London bombers was planning to fight for Al-Qaeda more than a year before the July 7 suicide attacks, security sources have revealed.

MI5 bugged Mohammad Sidique Khan and Shehzad Tanweer, a second bomber, for two months as they talked about Khan's desire to fight in what he saw as the Islamic holy war.

Agents also listened in as the men talked between themselves about Khan's plans to return to Pakistan where he had attended a camp for British terrorists. They also spoke about engaging in crime to raise money for Islamic extremism.

See:
http://www.timesonline.co.uk/article/0,,2087-2003915_1,00.html.

As the article points out, this totally contradicts statements that were made by Charles Clarke at the time. No wonder we are being promised a "narrative" of events rather than an inquiry.

I'm afraid it looks at least like "LIHOP".

See also:
http://www.bloggerheads.com/archives/2006/01/competence_and.asp
http://rachelnorthlondon.blogspot.com/2006/01/m15-bugged-july-7th-bombers-leak.html.