"The Defence of the Realm," by Cambridge University historian Christopher Andrew, was commissioned by the agency, MI5, to mark its 100th anniversary this year -- the first time a major intelligence agency has granted an outsider access to its secret files.
The 1,000-page volume, published Monday, describes an organization that fought Hitler with stunning success but struggled to combat Soviet espionage during the Cold War and initially failed to grasp the threat from Islamic extremism.
Andrew claims MI5 was "slow to see the coming menace of Islamist terrorism." The book says the agency's then-head, Stella Rimington, had never heard the name Al Qaeda until a meeting in Washington in 1996, during which MI5 representatives were "taken aback by the interest" in Osama bin Laden shown by the Americans.
That changed with the Sept. 11, 2001 attacks. Since then MI5 has foiled several major terrorist plots against Britain, including a plan to blow up trans-Atlantic airliners using liquid explosives, for which several British Muslims were sentenced to life in prison last month.
It failed to stop the July 7, 2005 London transit bombings, which killed 52 bus and subway passengers, and Andrew said Al Qaeda-inspired terrorists remain determined to kill even more people with chemical, biological or nuclear weapons.