In his first public speech for nearly two years, Security Service Director General Jonathan Evans said the Arab Spring revolts in Tunisia, Libya, Yemen and Egypt offered long-term hope of a more democratic Middle East.

But Britain's domestic spy chief said al Qaeda, which moved to Afghanistan from Arab countries in the 1990s and thence to Pakistan after the fall of the Taliban, was once again trying to gain a foothold in the Arab world.

"Today parts of the Arab world have once more become a permissive environment for al Qaeda," Evans said, according to an advance text of a rare speech in London outlining the key threats to British interests.

"A small number of British would-be jihadis are also making their way to Arab countries to seek training and opportunities for militant activity, as they do in Somalia and Yemen. Some will return to the UK and pose a threat here."

"This is a new and worrying development and could get worse," said Evans, a career officer who has served as head of the Security Service since April 2007.

The Arab Spring was lauded by Western leaders who hoped the revolts would usher in prosperity and freedom to the Middle East and North Africa, though Islamists have come to power in elections in Tunisia and Egypt.

Libya has been racked by turmoil while al Qaeda militants are expanding their foothold in the south of Yemen. A plot by al Qaeda in Yemen to blow up an airliner over the Atlantic was foiled in May by a British spy.

British officials say one of the biggest threats to the realm is likely to come from a domestic cell of militants who have received training or support from al Qaeda in Afghanistan, Pakistan, Somalia or Yemen.

OLYMPICS - "ATTRACTIVE TARGET"

Evans, who joined MI5 in 1980 after graduating from Bristol University with a degree in Classical Studies, said preparations for the Olympic Games in London were going well though the event was an attractive target for Britain's enemies.

Britain's national threat level is assessed at "substantial" - meaning an attack is a strong possibility - but that is still one notch lower than for most of the past decade.

"The Games present an attractive target for our enemies and they will be at the centre of the world's attention in a month or so," Evans said. "No doubt some terrorist networks have thought about whether they could pull off an attack."

But Evans warned against complacency, quipping that when intelligence folk smell roses they look for the funeral.

Though al Qaeda has made no successful attack on Britain since 2005, the threat has not evaporated, he said, adding that Britain has been the target of credible terrorist plot every year since the September 11, 2001 attacks on the United States.

"In back rooms and in cars and on the streets of this country there is no shortage of individuals talking about wanting to mount terrorist attacks here," Evans said. "It is essential that we maintain pressure on al Qaeda."

Some 100-200 British residents are thought to be involved in militant activities in the Middle East and the Horn of Africa, mostly young men from cities such as London and Birmingham between the ages of 18 and 30.

Evans said MI5, which now employs about 3,800 people up from 1,800 on the eve of the attacks on the Twin Towers in New York, had shifted some its focus to reflect the changed appreciation of the wider threat to British interests.

He said about half of MI5's priority casework now focused on Afghanistan or Pakistan dimensions, down from 75 percent a few years ago. As the threat from al Qaeda in Pakistan declines, it has risen in Yemen, Somalia and the Sahel, he said.

Evans said companies should seek to defend themselves against organised crime groups or states seeking to steal secrets or sow turmoil in their computer systems.

He cited the case of an unnamed London-listed company which lost 800 million pounds as the result of a state cyber attack.

Russia or China are thought to be behind the attack.

"The extent of what is going on is astonishing - with industrial-scale processes involving many thousands of people lying behind both state-sponsored cyber espionage and organised cyber crime," he said. (Editing by Ralph Boulton)

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