A foreign man now facing terrorist charges was not deported despite serving a jail sentence for robbery.
He is not among the 1,023 foreigners being sought by police after they were released from prison without deportation hearings.
But the disclosure, underlining the failings in the penal system, will increase the pressure on Charles Clarke, the Home Secretary, who is facing demands to resign over the fiasco.
The man, who cannot be named for legal reasons, was part of a gang convicted of robbing train passengers. He was jailed in 1996 and released two years later.
It is not known whether he was considered for removal to his home country as the Home Office only started keeping detailed deportation records in 1999.
The opposition parties, who have both called for Mr Clarke to step down, demanded more information about the case from the Home Office.
David Davis, the shadow Home Secretary, said: "If true, this is as bad as it could be. It would amount to an unforgivable failure to protect the public."
Nick Clegg, the Liberal Democrat home affairs spokesman, said: "If this is confirmed, it will be the gravest possible development. We need clarification from the Home Office as a matter of urgency."
The Home Office last night said it could not comment on the disclosure.
The Government's announcement of plans to expel all foreign prisoners after they finish their sentence caused fresh controversy yesterday. Tony Blair may be forced to disown the European Convention on Human Rights (ECHR) to fulfil his promise to Parliament.
The move has horrified human rights lawyers, but Downing Street refused yesterday to rule out the prospect of the country derogating from parts of the ECHR which was enshrined into law through the Human Rights Act. Mr Blair's official spokesman acknowledged there could be court challenges to the legislation.
The Act provides protection against torture and inhumane treatment, and guarantees the right to family life. It has been used to stop criminals being returned to dangerous places such as Somalia.
This ruling would have prevented the deportation of Mustaf Jama, a Somalian being hunted in connection with the killing of PC Sharon Beshenivsky, in Bradford.
Mr Blair has threatened in the past to consider derogating from the ECHR, but has never done so.
The Tory leader, David Cameron, is ready to back such a move, but civil rights groups would attack the Government for denying human rights to foreign nationals.
Mr Blair's official spokesman said: "Whenever we get the legislation through, if people want to challenge it in the courts, that is that."
As many as 200 foreigners are languishing in jail despite having completed their prison sentences. They are still locked up as the Prison Service and immigration officers try to decide what to do with them.
While the Government's focus is on trying to trace 1,023 offenders released without deportation hearings, The Independent has learnt of a separate group of inmates caught up in the crisis over foreign prisoners.
They include a Somalian detained for almost three years after completing his sentence; a man from the Democratic Republic of Congo who served nine months and was then locked up for another 14 months under immigration powers; and an Iraqi Kurd held for an extra six months at the end of his sentence.
Home Office sources last night put the number of foreign prisoners detained after their sentences ran out at about 200.
* An Iraqi Kurd wanted for questioning about the attempted murder of a man and a sex attack on a teenage girl after he was recommended for deportation has been arrested. Caliph Ali Asmar, 25, was arrested in Hull on Wednesday.