The Government confirmed that Yassin Nassari - who was arrested at Luton Airport with blueprints for a rocket in his luggage - was freed from the maximum security Wakefield Prison 17 days early.

The second man released was named by sources as Abdul Muneem Patel, a teenager who had been serving a six-month term at Glen Parva young offenders' institute in Leicestershire for owning an explosives manual.

Opposition politicians said it was remarkable that terrorists had been eligible for the end of custody licence (ECL) scheme, which was brought in last year to create more space in the overcrowded jails.

Liberal Democrats accused Mr Straw of "shutting the stable door after the horse has bolted".

Nassari walked free on February 11, seven months after a three-and-a-half-year sentence was handed down, but had also spent more than a year on remand before conviction. Patel was released on January 7.

A Ministry of Justice spokeswoman said: "The number of terrorism-related cases likely to fall within the current ECL criteria is very small.

"However, in the light of these cases, the Justice Secretary has decided to change the criteria for the ECL scheme so that any prisoner convicted under terrorism legislation would not be eligible."

Mr Straw said: "In the light of this case I have taken action to tackle this issue - no more prisoners convicted under terrorism legislation will be released through the ECL scheme."

Shadow home secretary David Davis said: "Jack Straw must now say when he knew about this, and why he has only just acted. Were these men released with or without his knowledge? If it was without, who on earth is running his department?"