Terrorist Accounts at BCCI Alleged : Finance: A London newspaper lists Abu Nidal and Islamic Jihad as clients of the defunct bank. British intelligence warnings last year are reported.

Calls for an investigation of the collapsed, London-based Bank of Credit and Commerce International (BCCI) were issued Sunday after a newspaper reported that London branches serviced accounts of international terrorists.

The Sunday Times of London reported that Arab terrorist Abu Nidal used London BCCI branches to finance his group’s operations against Western targets.

The BCCI also held accounts for Islamic Jihad, the paper said. A branch of the pro-Iranian group Hezbollah, the Islamic Jihad is believed responsible for the Beirut kidnaping of Terry Waite, aide to the Archbishop of Canterbury, and John McCarthy, a British television journalist.

Further, it was charged, British intelligence agencies warned the Bank of England in early 1990 of the terrorists’ BCCI accounts, through which millions of dollars reportedly passed.

The Sunday Times said that Abu Nidal’s group, the Revolutionary Council of Fatah, was responsible for the deaths of 250 victims worldwide during the 10 years that its operations were financed at least in part through the BCCI branches in London.

The disclosures brought demands Sunday from Labor opposition MPs for an investigation on how BCCI managed to operate from London--despite warnings from the secret service and BCCI officials that the bank was riddled with suspicious clients and corrupt executives.

The Sunday Times claimed to have seen secret BCCI documents, which it said raised questions about the role of the government and the Bank of England in failing to investigate BCCI activities sooner.

Labor Party leader Neil Kinnock’s office said Sunday that Prime Minister John Major should make a statement on the matter in Parliament “subject to the interests of security against terrorist operations.”

Tony Blair, a Labor spokesman, said a “deepening scandal” is developing, because the allegations are not only of “corruption and catastrophe but that the security services were warning of terrorist links in this bank.”

“I think it is absolutely essential that the prime minister come to the House of Commons tomorrow (Monday) and tell us how much government ministers knew, when they knew it and what on Earth did they do about it,” Blair said.

The worldwide operations of BCCI--which had about 120,000 British account holders--were shut down by the Bank of England on July 5 without advance notice to the bank’s majority owner, Sheik Zayed ibn Sultan al Nuhayan. The sheik, who is ruler of Abu Dhabi and president of the United Arab Emirates, has strongly protested the action.