The Dutch counter-terrorism agency said in a report to Parliament its new threat assessment was also influenced by arrests elsewhere in Europe that had thwarted attacks by groups directed or influenced by Al-Qaeda in Pakistan and Afghanistan.

The threat level had been at 'substantial' before as religious and racial tensions simmered after an Islamic militant killed director Theo Van Gogh in 2004 over a film he made accusing Islam of condoning violence against women.

The Dutch government has warned the latest film, expected to be released this month by populist Geert Wilders, might spark unrest and sanctions similar to those triggered when Danish newspapers published a cartoon of the Prophet Mohammad in 2006.

Wilders has given few details about the film he is calling 'Fitna', an Arabic term used in the Quran and sometimes translated as 'strife'. He has called the Quran a 'fascist' book that incites violence and said it should be banned.

The Dutch counter-terrorism agency said the way Islam was debated in the Netherlands had raised the profile of the country in Muslim countries, noting Islamist death threats against Wilders and calls to attack Dutch troops.

Afghan Taleban militants, backed by Al-Qaeda, have branded the recent reprinting of the cartoon of the Prophet Mohammad and the Wilders' film part of a 'Crusader war' against Muslims.

Afghan demonstrators angered by the cartoon and in anticipation of the film have demanded the expulsion of Danish and Dutch troops serving with North Atlantic Treaty Orgaisation in its efforts to quell a Taleban-led insurgency.

Four-stage system
The Netherlands has a four-stage risk classification system - the lowest is 'minimal', the highest is 'critical'.

The counter-terrorism agency cut the threat level to the second-lowest 'limited' last April, citing little fresh activity by militant networks in the country and growing resistance to radicalisation among the one million Muslims in the Netherlands.

In its new report, the agency noted that all the important Muslim organisations in the Netherlands were calling for calm in response to the Wilders film.

Wilders said in an interview on Thursday he was disappointed that no Dutch broadcaster wanted to show it.

'I had hoped that a television broadcaster would say: 'You have the right to do this, we will give you a podium',' he told Dutch newspaper NRC Handelsblad.

Wilders suggested he would probably launch it on March 28 at the government's press centre in The Hague, although this would be impossible should he have to fund extra security himself.

'Fitna' will also be made available on a special website.

A majority of Dutch people want the film to be broadcast even though they fear it will stoke tension with Muslims and harm relations with Arab nations, a poll showed on Wednesday.

Foreign Minister Maxime Verhagen met ambassadors from Muslim countries to discuss the film and stress that the government did not share Wilders' views. He asked them to make sure that Dutch citizens and buildings abroad are protected.

Pakistan's Foreign Ministry has accused Wilders of 'propagating the politics of hate and promoting xenophobia'. -- REUTERS