In sharp contrast to the Centre's stand, a key government-appointed panel on Tuesday felt existing laws were not enough to deal with terrorism and recommended a comprehensive anti-terrorist legislation.

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"A comprehensive and effective legal framework to deal with all aspects of terrorism needs to be enacted," the second Administrative Reforms Commission said in its eighth report on 'Combating Terrorism' [Images].

Releasing the 185-page report at a press conference, Commission's Chairman M Veerappa Moily felt that present laws were not enough to tackle the menace and said the law should have adequate safeguards to prevent its misuse.

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The government has been of the view that the existing laws were adequate to deal with terrorism and crimes having inter-state links.

He said a legal provision to deal with terrorism could be incorporated in a separate chapter in the National Security Act, 1980.

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The Commission also suggested that no person accused of an offence punishable under NSA should be released on bail.

He refuted the opposition's charge that the UPA government was soft on terror and said the demand by BJP-ruled states of Rajasthan and Gujarat for a Maharashtra-type anti-terror law would not be an answer.

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On the saffron party's demand for POTA-like law, he said it was not a comprehensive measure and could be misused.

Suggesting a federal agency to investigate terrorist offences, the report said that a specialised division should be created in the CBI to go deal terror cases.

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The Commission also recommended that special fast track courts should be set up exclusive for trial of terrorism-related cases.

Measures should also be taken to block flow of funds for financing terrorist activities, it added.

The Commission, which has submitted its report to Prime Minister Manmohan Singh [Images] and Home Minister Shivraj Patil [Images], said there was a need to define 'more clearly' the criminal acts, which can be construed as being terrorist in nature.

The report, released to media soon after the serial blasts in the national capital, says the definition should deal with use of firearms and explosives to cause damage to life and property, assassination of public functionaries, including such attempts, and providing finances for such activities.

On its recommendation for setting up of a specialised division in the CBI to investigate terror offences, the panel said it should be ensured that the unit was staffed by personnel of proven integrity and those who were professionally competent.

They should also have developed the required expertise in investigation of terrorism related offences, it said.

Taking a strong view of financing of terrorism, the panel recommended suitable amendments in the Prevention of Money Laundering Act (PMLA) to widen its scope and outreach.

It may be examined whether institutional coordination mechanisms between the Directorate of Enforcement and other intelligence collecting and investigating agencies, could be strengthened and some provisions of the PMLA delegated to them by the Enforcement Directorate, the Commission said.

On measures to block the flow of funds for financing terrorist activities, it said the new legal framework on terrorism may incorporate provisions regarding freezing of assets, funds, bank accounts, deposits and cash when there is reasonable suspicion of their intended use in terrorist activities.