NATO is not suited to tackling the threat of global terrorism and should be complimented by a new international organisation, Michael Portillo has said.

The former defence secretary said the transatlantic alliance had been damaged by recent rows.

He told the Commons that the "time has come" for a new international organisation aimed at dealing with the terrorist threat.

The comments came in the wake of a damaging row that saw France, Germany and Belgium repeatedly blocking attempts to provide military hardware for the protection of Turkey's border with Iraq.

"This crisis has cost the West dearly in terms of damage to its institutions. New institutions may be required," warned Portillo.

"I am a great supporter of NATO, but it is damaged and in any case it is geographically limited," he said.

"I believe that we should look for a new organisation, not to replace NATO but to stand alongside it."

Portillo raised the prospect of a new organisation that would effectively lock together those countries that support the Bush administration's hawkish approach to the pre-emptive tackling of possible threats to national security.

The global body's aim would be to counter terrorism, Portillo said.

"The United States, Britain and Australia would certainly be founder members of that new organisation. Perhaps its headquarters would be in Prague, or perhaps it would be in Madrid," he said.

"Whatever the precise form of that new organisation, I believe its time has come."

Portillo said the lessons of the recent past justified the need to take the fight to terrorist organisations and rogue states.

His speech during the debate on Iraq drew parallels between the West's failure to "offer any effective response" to terrorist attacks during the 1990s and its similar failure to stand up to Iraqi defiance of the United Nations.

Portillo said that inadequate responses to terror attacks was being viewed "as a sign of weakness and that emboldened our enemies".

He added that the prime minister and other world leaders had failed to take effective action in 1998 or 1999.

"Both Saddam and al Qaeda separately could take comfort from the clear evidence that the West was not willing to take firm action, and that is the connection between al Qaeda and Saddam," he said.

"In an important sense, Saddam and bin Laden are co-belligerents. They share a hatred of the West and a belief in the efficacy of terror... A display of weakness will bring more terror, not less."