In the US, security was increased in the wake of the attacks of September 11, 2001, while bombings in Madrid, and more recently London, have put European police forces on high alert.

"We have several elements of information that make us think that countries in this region, especially Japan, could have been targeted," Judge Bruguiere said.

The judge, who has organised the arrest of hundreds of terrorist suspects in the past 20 years, said the capacity or desire of al-Qa'ida to destabilise the southeast Asia region had been somewhat overlooked.

"We forget that the al-Qa'ida organisation is sharpening its strategy -- more than just focusing on so-called soft targets, it is looking to hit economic and financial centres," he said. "They know the economic reality well. Any attack on a financial market, like Japan, would mechanically have an important economic impact on the confidence of investors. Other countries in this region, such as Singapore and Australia, are also potential targets."

In an interview with London's Financial Times, Judge Bruguiere said that there was not enough public consciousness of the terrorist risk.

"This lack of consciousness makes it extremely difficult for governments to pass laws that are pro-active and allow their law enforcement and intelligence services to pre-empt attacks and aggressively anticipate threats.

"There is more work to be done to sensitise the public to the threat."

John Howard agreed and warned that Australia should not imagine it was free from the possibility of a terrorist attack.

"We are, in my view, well prepared, but the important thing is not to have an effective response mechanism after the attack. The aim is to try to stop it occurring in the first place," the Prime Minister said.

"The best way you do that is by having as good as intelligence as possible and also working very hard to make sure that any people within our own community that might have a disposition to behave like a terrorist is identified and dealt with."

Judge Bruguiere visited Australia last month to question Jack Roche, the nation's first homegrown terrorist to be jailed for plotting to bomb Israeli missions in Canberra and Sydney.

He is also heading the investigation into suspected al-Qa'ida operative Willie Brigitte.