Jamaat-ud-Dawa, a group linked to the Lashkar-e-Tayiba, poses a real threat to the United Kingdom, with its offices and camps in Pakistan providing a 'key portal' for young British Muslims seeking to join al-Qaeda.
Though designated as a terrorist organisation by America in 2006, Jamaat-ud-Dawa remains a legitimate organisation in Pakistan, where it has hundreds of offices and numerous relief camps, a report in the Times of London said.
Since 2001 British intelligence officers and diplomats have noted with alarm, al-Qaeda's success in merging Kashmiri militants with the global jihadi network.
British passport holders are particularly attractive recruits and the JuD, its offices and camps so far untouched in Pakistan, is now regarded as a key portal for young British Muslims seeking to join al Qaeda, the report said.
"These training camps... pose a real threat to the UK," the newspaper quoted a diplomat in Islamabad.
While similar organisations have more or less been ostracised by Pakistani authorities in recent years, JuD is of specific importance in highlighting the limits of Pakistan's commitment to combating regional and international terrorism, with special significance to the UK, the report said.
Britain's worries are more acute and related directly to the disproportionate number of Kashmiris among the UK's 480,000-strong Pakistani population.
Following imposition of a ban on Lashkar-e-Tayiba in Pakistan after 2001 attack on the Indian Parliament, its founder Hafiz Mohammed Saeed, formed JuD in 2002 as a charity organisation.
Contending that "opposing democracy" and "establishing Islamic caliphate" were the aims of the Jamaat, the Times said Pakistan cannot let the group carry on with fooling people about its objectives.
"We don't like democracy," Atiq ur-Rahman, a leader of JuD, told the paper, in the northwestern Pakistani city of Peshawar, just three weeks before the Mumbai attacks.
"Our struggle is to establish an Islamic caliphate throughout the world. Whichever force tries to resist it shall be shattered," he said.
Based in Lahore, the JuD has been accused ever since of being little more than the public front for the LeT's Kashmiri militants.
LeT was formed in Afghanistan in 1989 by Hafiz Mohammed Saeed. After the withdrawal of the Russians from Afghanistan the LeT, funded by the ISI, turned its attention to fighting Indian forces in Kashmir.
The LeT has been blamed by India for carrying out the Mumbai terror attacks.
"The LeT's December 2001 attack on the Indian Parliament drew the neighbouring countries to the edge of war, after which the organisation was banned. The JuD, formed by Hafiz Saeed in 2002 as a charity organisation, emerged directly from the LeT being forced underground," the report said.
Shehzad Tanweer, one of the 7/7 London tube bombers, allegedly met al-Qaeda commanders at the JuD madrassa in Lahore in 2004 and Hafiz Saeed was himself briefly detained there in 2006 - where he was questioned by British anti-terrorist squad detectives - and investigated for connections to the British-based terror cell plotting to blow up airliners over the Atlantic.
Washington accuses JuD of recruiting and funding for the LeT, which wants to undo the progress made in India-Pakistan relations that will allow Islamabad to focus its efforts on military sanctuaries along its border with Afghanistan, the report said.