Charles Clarke is is set to offer concessions over plans to put suspected terrorists under a form of house arrest.

However, ahead of talks on the issue with the Conservative leader, Michael Howard, and his Liberal Democrat counterpart, Charles Kennedy, the home secretary denied making a U-turn, saying: "I have never actually used the phrase house arrest."

But both Clarke and Tony Blair are expected to offer the opposition parties concessions on the degree of judicial oversight during the talks on Friday.

"We must never have the position in this country where a politician can decide whether you walk free or are put under house arrest," Kennedy said yesterday. "That must be a judicial decision."

Clarke has so far insisted that in matters of national security the executive, rather than the judiciary, take the decisions.

The Conservatives last week said that all suspects must either be found guilty in a court of law or released.