Britain and the United States are losing the battle for "hearts and minds" in Afghanistan because of over-reliance on heavy bombing raids, the High Commissioner for Pakistan has warned.

Maleeha Lodhi was speaking at the first session of a Parliamentary inquiry into tackling terrorism, headed by Birmingham MP Khalid Mahmood.

Mr Mahmood (Lab Perry Barr) is chairing the new All-Party Inquiry into Tackling Terrorism, which includes peers and MPs from all parties and will present its findings to the Prime Minister and Foreign Secretary.

He has assembled a panel of MPs to quiz witnesses including diplomats, senior police officers and academics on how Britain can fight terrorism at home and abroad.

Members of the committee include Sir Gerald Kaufman, the former shadow foreign secretary, Baroness Shirley Williams, a former Education Secretary and founder of the SDP.

Other members include Walsall South MP Bruce George (Lab), former chair of the Defence Select Committee, Sion Simon (Lab Erdington) and Robert Flello (Lab Walsall South).

Dr Lodhi said: "A heavy reliance on bombing by NATO forces is leading to a loss of hearts and minds in southern Afghanistan."

In a candid appearance before the committee, she said al-Qaida was "on the run" and reduced to "a few small cells".

But she admitted insurgents from Afghanistan may be hiding among the 2.7 million refugees in camps inside Pakistan.

Dr Lodhi said Pakistan was a partner in an international coalition against terrorism alongside countries such as the US and UK.

But she said there were radically different views about the root causes of terrorism. "We believe the root causes are foreign manipulation, denial of self determination and economic exclusion.

"People in the West appear to see Islamo-fascism and wicked ideology as the root causes." The All-Party Group met yesterday as Tony Blair and Cabinet colleagues were briefed by the new head of MI5 on the terror threat facing Britain.

Jonathan Evans delivered his briefing at the first meeting of the Government's new committee on security and terrorism.

The committee will meet monthly and brings together representatives of the intelligence agencies, police and other relevant Whitehall bodies.

Home Secretary John Reid, Foreign Secretary Margaret Beckett and Communities and Local Government Secretary Ruth Kelly joined the Prime Minister at the meeting.

The committee was set up as part of the reorganisation of the Home Office, which will now concentrate on security and policing while prisons and the criminal justice system are being hived off to the Department for Constitutional Affairs, to be renamed the Ministry of Justice.

Earlier, Mr Blair warned that terrorism remained a "global threat" which would "come after us" unless it was tackled.

He said: "We have to fight it whether it's in Iraq or Afghanistan or anywhere else.

"This is a very deep-rooted problem right round the world ... if we don't fight it, it's going to come after us."

Shadow home secretary David Davis said it was "extraordinary" that the new committee had been set up more than five years after the September 11 atrocities.

He said: "Splitting the Home Office will undoubtedly distract from the exact subject this committee has been set up to deal with - namely terrorism."