Foreign Secretary Jack Straw told MPs the new travel advice came in the light of intelligence received on Monday morning.

Repeating the government's insistence that it knew of no specific threats to Bali before the attack, Mr Straw said terrorists would win if the world was "shut down".

Straw said shutting down the world would hand terrorists victory

Mr Straw's statement comes after Conservative leader Iain Duncan Smith said the government was "in a mess", with conflicting statements made about what warnings had been received ahead of the bombing.

The foreign secretary said he was "very sorry" that shortcomings in getting enough staff to Bali to help victims' families had added to the terrible burden they carried.

Prompted by opposition demands, Mr Straw said he was considering setting up a special task force at the Foreign Office to deal with such incidents in the future.

Mr Straw also announced that the Commons intelligence and security select committee would be looking at how the intelligence services had acted before the bomb.

All intelligence material would be available to the committee, which is currently on a visit to Australia, promised Mr Straw.

The latest travel advice follows warnings for Britons not to travel to Indonesia.

I dearly wish there had been intelligence that could have prevented this atrocity, but the answer sadly is that there was none

Jack Straw Foreign Secretary

Those already in the south-east Asian country were told to leave unless their presence there was essential.

Britons in other south-east Asia countries have also been advised to take extreme care in public places.

The latest advice warns that the arrest of militant Muslim cleric Abu Bakar Bashir and the possible arrests of other extremist leaders "could lead to a strong reaction from their supporters" against western interests.

Mr Straw said he believed the intelligence services had made "correct judgements" about the threat to Bali.

Intelligence questions

A "generic" threat received in late September mentioned Bali, as well as 55% of Indonesia's land mass, said Mr Straw.

But there was "no specific intelligence relating to the attack in Bali".

Mr Straw added: "I dearly wish there had been intelligence that could have prevented this atrocity, but the answer sadly is that there was none."

Australia held a day of mourning on Sunday

The government would err on the side of caution in travel advice, he said.

But failing to make proper judgements would mean the world was "literally closed down and the terrorists would have won".

The UK Government has also faced complaints from Britons caught up in the tragedy about the lack of Foreign Office help.

Eleven Britons are confirmed dead with another eight presumed killed and a further 13 still missing.

'Fog of uncertainty'

Mr Straw has delayed his arrival at a monthly European Union meeting in Luxembourg to make the statement to the House of Commons, which was demanded by the Tories.

Shadow foreign secretary Michael Ancram welcomed the intelligence committee's inquiry and said its findings should be debated fully in the Commons.

Mr Ancram demanded to know what intelligence the UK had received from American agencies and at what time.

He called on Mr Straw "dispel the fog of uncertainty" around the government's handling of the aftermath of the Bali attack, created by "ambiguous and contradictory" briefings.

He asked how a threat of possible attacks in "six islands out of 6,000" in Indonesia could have been considered a "generic" warning, as it was termed by a Downing Street spokesman last week.

Inquiry demand

Menzies Campbell, for the Liberal Democrats, echoed this call and Mr Straw said he was considering creating such a unit.

Mr Campbell also demanded a confidential inquiry, "by a High Court judge or someone of similar calibre", to look at what lessons could be learned.

Mr Straw insisted that the US, Australia and the UK had received the same intelligence information had, largely, given similar advice.

"The United States judged that Bali was safe that members of their own staff, their embassy staff in Jakarta were present on holiday in Bali when this atrocity took place," he said.