The intelligence services have become embroiled in a rare public row with the Saudi government by describing comments about the 7/7 London bombings made by the Saudi king as a "myth".

King Abdullah accepted that al-Qa'eda remains a problem in his country

King Abdullah, currently on a state visit to Britain, said in an interview that his country had "sent information before the terrorist attacks" which was not acted upon and which "may have been able to avert the tragedy".

However, MI5 has hit back with a rare public statement on the agency's website stating: "No prior warning of the attacks was received from any source. The Saudis provided information about possible planning for an attack in the UK which was materially different from the attacks that took place in London on 7 July."

A Whitehall official added that the tip from the Saudis was "vague and lacking detail".

The row is the latest controversy to hit the first state visit by a Saudi Royal to Britain in twenty years. David Miliband, the foreign secretary, cancelled a joint conference arrangement with the Saudi foreign minister following the King's comments.

The Foreign Office insisted the decision was made after Mr Miliband's announcement that he was adopting a second child. The American child is understood to have been born early and Mr Miliband had to leave the country for the birth.

However, members of the Saudi entourage said they saw it as a snub and had only been given very short notice of the cancellation forcing their own minister to also pull out.

The King's comments on the 7/7 attacks, which killed 56 people, were interpreted as an attempt by the Saudis to deflect criticism expected during the visit that they are not doing enough to tackle terrorism.

King Abdullah is thought to be referring to an alleged memo sent on December 14 2004 to the Saudi Embassy in Washington which was shared with the CIA and MI5.

It stated that in December 2004, the Saudi Government had arrested one of its nationals, named Adel, who had revealed under interrogation that "in six months there would be a multi-faceted operation in London, using explosives from Bosnia, and would include the area around Edgewood road" (sic).

Adel allegedly claimed that $500,000 was still needed to fund the London operation, four people would be carrying it out and although he did not know their names, he gave their rough ages, heights and descriptions.

In February 2005, the Saudis allegedly provided another report to the Americans and British with a more detailed description of those who were to carry out the attacks.

Even before the King's comments, the first visit by a Saudi monarch was under fire following the government's decision last December to abandon a long-running corruption investigation into a £40bn deal between BAE Systems and the Saudi Government.

The Serious Fraud Office probe is alleged to have uncovered secret payments made to the private bank accounts of Saudi royals as part of the deal.

Vincent Cable, the acting leader of the Liberal Democrats, said that he had written to the Saudi ambassador and was boycotting the visit. There are also protests planned for later in the week.

"In my opinion, it is quite wrong for the British government to have proposed a state visit at this time," Mr Cable said. "I have introduced three debates in Parliament this year expressing serious concerns over the Al-Yamamah contract and the corruption allegedly involved. I have also been very critical of members of the Saudi royal family and the Saudi record on human rights."

The Foreign Office defended the visit and said that the decision to invite King Abdullah reflected the "long-standing friendship" between the two nations. A spokeswoman said that British and Saudi interests were "intertwined and inseperable."

But this did not stop rumours that a full scale diplomatic row had blown up between the two countries, triggered by King Abdullah's remarks in the BBC interview.

"Perhaps it's because the Saudis feel the British are calling the king a liar by denying his remarks on Saudi intelligence," said one Saudi official who had flown in from Riyadh.