* Former MI5 chief: U.S.-led wars increased terror threat
* Iraq, Afghanistan "radicalised" Muslims angry with West
* Saddam Hussein posed limited terror risk; no link to 9/11
By Peter Griffiths
LONDON, July 20 (Reuters) - Britain’s support for the wars in Iraq and Afghanistan radicalised many Muslims and triggered a big rise in terrorism plots that nearly overwhelmed the British security services, the former head of the domestic intelligence agency said on Tuesday.
Giving evidence to an official inquiry into the Iraq war, Eliza Manningham-Buller, former MI5 director general, said the U.S.-led invasions had substantially raised the number of plots against Britain.
"It undoubtedly increased the threat and by 2004 we were pretty well swamped," she said. "We were very overburdened by intelligence on a broad scale that was pretty well more than we could cope with.
"Iraq radicalised, for want of a better word ... a few among a generation who saw our invasion of Iraq on top of our invasion of Afghanistan as being an attack on Islam."
Britain has withdrawn its soldiers from Iraq, but still has 9,500 troops in Afghanistan. Polls suggest a majority of voters want British soldiers to leave, while a rising death toll has put pressure on Prime Minister David Cameron’s government.
Cameron and his predecessor Gordon Brown have argued that Britain has soldiers in Afghanistan to help counter the threat of Islamist attacks in Britain.
The inquiry, chaired by former civil servant John Chilcot, was set up last year by Brown to learn lessons from the war. Previous probes have cleared the government of any wrongdoing.
After the start of the war in Iraq in 2003, intelligence services identified about 70 to 80 British-born Muslims who went to Iraq to fight Western forces, Manningham-Buller added.
Between 2001 and 2008, Britain investigated about 16 "substantial" domestic plots, of which about 12 were stopped, she said.
The security services failed to stop the July 7, 2005 bombings on London’s transport network that killed 52 commuters, as well as a similar attack that failed two weeks later when the bombs did not explode, she said.
Asked about the threat of Iraqi-backed attacks against Britain before the war, Manningham-Buller said the risk was "low".
"We did not believe they had the capacity to do much in the UK," she told the inquiry. A previously classified letter sent by Manningham-Buller to security service colleagues in 2002 said there was no convincing evidence of links between Saddam and al Qaeda on chemical or biological weapons.
There was also no solid evidence to link Iraq with the Sept. 11, 2001 attacks in the United States, she added in the letter, copies of which were released to the media.
Former U.N. weapons inspector Hans Blix is expected to appear before the inquiry in the coming weeks. The inquiry is expected to conclude at the end of this year. (Editing by Jon Loades-Carter)