From the Downing Street website:

Today, I want to focus my remarks on terrorism.

But first, let me address one point.

Some have suggested that by holding a Strategic Defence and Security Review, Britain is somehow retreating from an activist role in the world.

This is the complete reversal of the truth.

Yes, we are dealing with the deficit, but we are also making sure our defences are strong.

Britain will continue to meet the Nato 2 per cent target for defence spending.

We still have the fourth largest military budget in the world.

And at the same time, we are putting that money to better use, focusing on conflict prevention and building a much more flexible army.

That's not retreat, it's hard headed. Every decision we take has three aims firmly in mind.

First, to support our continuing Nato mission in Afghanistan.

Second, to reinforce our actual military capability.

As Chancellor Merkel's government is showing here in Germany what matters is not bureaucracy – which frankly Europe needs a lot less of – but the political will to build the military capability we need, as nations and allies, to deliver in the field.

And third, to make sure Britain is protected from the new and various threats it faces.

That's why we're investing in a national cyber-security programme and sharpening our readiness to act on counter-proliferation.

The biggest threat to our security comes from terrorist attacks – some of which are sadly carried out by our own citizens.

It's important to stress that terrorism is not linked exclusively to any one religion or ethnic group.

The UK still faces threats from dissident republicans.

Anarchist attacks have occurred recently in Greece and Italy.

And of course, yourselves in Germany were long-scarred by terrorism from the Red Army Faction.

Nevertheless, we should acknowledge that this threat comes overwhelmingly from young men who follow a completely perverse and warped interpretation of Islam and who are prepared to blow themselves up and kill their fellow citizens.

Last week at Davos, I rang the alarm bell for the urgent need for Europe to recover its economic dynamism.

And today, though the subject is complex, my message on security is equally stark.

We won't defeat terrorism simply by the actions we take outside our borders.

Europe needs to wake up to what is happening in our own countries.

Root of the problem

Of course, that means strengthening the security aspects of our response – on tracing plots and stopping them, counter-surveillance and intelligence gathering.

But this is just part of the answer. We have to get to the root of the problem.

We need to be absolutely clear on where the origins of these terrorist attacks lie – and that is the existence of an ideology, 'Islamist extremism'.

And we should be equally clear what we mean by this term, distinguishing it from Islam.

Islam is a religion, observed peacefully and devoutly by over a billion people. Islamist extremism is a political ideology, supported by a minority.

At the furthest end are those who back terrorism to promote their ultimate goal: an entire Islamist realm, governed by an interpretation of sharia.

Move along the spectrum, and you find people who may reject violence, but who accept various parts of the extremist world-view including real hostility towards western democracy and liberal values.

It's vital we make this distinction between the religion and the political ideology.

Time and again, people equate the two. They think whether someone is an extremist is dependent on how much they observe their religion.

So they talk about 'moderate' Muslims as if all devout Muslims must be extremist. This is wrong.

Someone can be a devout Muslim and not be an extremist.

We need to be clear: Islamist extremism and Islam are not the same thing.

Muddled thinking

This highlights a significant problem when discussing the terrorist threat we face: there is so much muddled thinking about this whole issue.

On the one hand, those on the hard right ignore this distinction between Islam and Islamist extremism and just say:

Islam and the West are in irreconcilable. This is a clash of civilisations.

So it follows: we should cut ourselves off from this religion – whether that's through the forced repatriation favoured by some fascists or the banning of new mosques as suggested in some parts of Europe.

These people fuel Islamaphobia. And I completely reject their argument.

If they want an example of how Western values and Islam can be entirely compatible, they should look at what's happened in the past few weeks on the streets of Tunis and Cairo.

Hundreds of thousands people demanding the universal right to free elections and democracy.

The point is this: the ideology of extremism is the problem. Islam, emphatically, is not.

Picking a fight with the latter will do nothing to confront the former.

On the other hand, there are those on the soft left who also ignore this distinction.

They lump all Muslims together, compiling a list of grievances and arguing if only governments addressed them, this terrorism would stop.

So they point to the poverty that so many Muslims live in and say: get rid of this injustice and the terrorism will end.

But this ignores that fact that many of those found guilty of terrorist offences in the UK have been graduates, and often middle class.

They point to the grievances about Western foreign policy and say: stop riding roughshod over Muslim countries and the terrorism will end.

But there are many people – Muslim and non-Muslim alike – who are angry about western foreign policy and don't resort to acts of terrorism.

They also point to the profusion of unelected leaders across the Middle East and say: stop propping them up and creating the conditions for extremism to flourish.

But this raises the question: if a lack of democracy is the problem, why are there extremists in free and open societies?

Now, I am not saying these issues aren't important.

Yes, we must tackle poverty.

Yes, we must resolve sources of tension – not least in Palestine.

And yes, we should be on the side of openness and political reform in the Middle East.

On Egypt, our position is clear: we want to see the transition to a more broadly based government with the proper building blocks of a free and democratic society.

I simply don't accept that there's a dead-end choice between a security state and Islamist resistance.

But let's not fool ourselves, these are just contributory factors. Even if we sorted out all these problems, there would still be this terrorism.

Identity and radicalisation

The root lies in the existence of this extremist ideology.

And I would argue an important reason so many young Muslims are drawn to it comes down to a question of identity.

What I'm about to say is drawn from the British experience, but I believe there are general lessons for us all.

In the UK, some young men find it hard to identify with the traditional Islam practised at home by their parents whose customs can seem staid when transplanted to modern Western countries.

But they also find it hard to identify with Britain too, because we have allowed the weakening of our collective identity.

Under the doctrine of state multiculturalism, we have encouraged different cultures to live separate lives, apart from each other and the mainstream.

We have failed to provide a vision of society to which they feel they want to belong.

We have even tolerated these segregated communities behaving in ways that run counter to our values.

So when a white person holds objectionable views – racism, for example – we rightly condemn them.

But when equally unacceptable views or practices have come from someone who isn't white, we've been too cautious, frankly even fearful, to stand up to them.

The failure of some to confront the horrors of forced marriage the practice where some young girls are bullied and sometimes taken abroad to marry someone they don't want to is a case in point.

This hands-off tolerance has only served to reinforce the sense that not enough is shared.

All this leaves some young Muslims feeling rootless.

And the search for something to belong to and believe in can lead them to this extremist ideology.

For sure, they don't turn into terrorists overnight.

What we see is a process of radicalisation.

Internet chatrooms are virtual meeting places where attitudes are shared, strengthened and validated.

In some mosques, preachers of hate can sow misinformation about the plight of Muslims elsewhere.

In our communities, groups and organisations led by young, dynamic leaders promote separatism by encouraging Muslims to define themselves solely in terms of their religion.

All these interactions engender a sense of community, a substitute for what the wider society has failed to supply.

You might say: as long as they're not hurting anyone, what's the problem with all this?

I'll tell you why.

As evidence emerges about the backgrounds of those convicted of terrorist offences, it is clear that many of them were initially influenced by what some have called 'non-violent extremists' and then took those radical beliefs to the next level by embracing violence.

And I say this is an indictment of our approach to these issues in the past.

And if we are to defeat this threat, I believe it's time to turn the page on the failed policies of the past.

So first, instead of ignoring this extremist ideology, we – as governments and societies – have got to confront it, in all its forms.

And second, instead of encouraging people to live apart, we need a clear sense of shared national identity, open to everyone.

Let me briefly take each in turn.

Tackle all forms of extremism

First, confronting and undermining his ideology.

Whether they are violent in their means or not, we must make it impossible for the extremists to succeed.

For governments, there are obvious ways we can do that.

We must ban preachers of hate from coming to our countries.

We must also proscribe organisations that incite terrorism – against people at home and abroad.

Governments must also be shrewder in dealing with those that, while not violent, are certainly, in some cases, part of the problem.

We need to think much harder about who it's in the public interest to work with.

Some organisations that seek to present themselves as a gateway to the Muslim community are showered with public money despite doing little to combat extremism.

As others have observed, this is like turning to a right-wing fascist party to fight a violent white supremacist movement.

So let's properly judge these organisations:

Do they believe in universal human rights – including for women and people of other faiths?

Do they believe in equality of all before the law?

Do they believe in democracy and the right of people to elect their own government?

Do they encourage integration or separatism?

These are the sorts of questions we need to ask.

Fail these tests and the presumption should be not to engage with organisations.

No public money. No sharing of platforms with Ministers at home.

At the same time, we must stop these groups from reaching people in publicly funded institutions – like universities and prisons.

Some say: this is incompatible with free speech and intellectual inquiry.

I say: would you take the same view if right-wing extremists were recruiting on campuses?

Would you advocate inaction if Christian fundamentalists who believe Muslims are the enemy were leading prayer groups in prison?

And to those who say these non-violent extremists are helping to keep young, vulnerable men away from violence, I say nonsense.

Would you allow the far right groups a share of public funds if they promise to lure young white men away from fascist terrorism?

But, at root, challenging this ideology means exposing its ideas for what they are -completely unjustifiable.

We need to argue that terrorism is wrong – in all circumstances.

We need to argue that their prophecies of a global war of religion pitting Muslims against the rest of the world are rubbish.

Governments cannot do this alone.

The extremism we face is a distortion of Islam so these arguments, in part, must be made by those within Islam.

So let's give voice to those followers of Islam in our own countries – the vast often unheard majority – who despise the extremists and their worldview.

Let's engage groups that share our aspirations.

Stronger citizenship

Second, we must build stronger societies and identities at home.

Frankly, we need a lot less of the passive tolerance of recent years and much more active, muscular liberalism.

A passively tolerant society says to its citizens: as long as you obey the law, we will leave you alone.

It stands neutral between different values. A genuinely liberal country does much more.

It believes in certain values and actively promotes them.

Freedom of speech. Freedom of worship. Democracy. The rule of law. Equal rights regardless of race, sex or sexuality.

It says to its citizens: this is what defines us as a society.

To belong here is to believe in these things.

Each of us in our own countries must be unambiguous and hard-nosed about this defence of our liberty.

There are practical things we can do as well.

That includes making sure immigrants speak the language of their new home.

And ensuring that people are educated in elements of a common culture and curriculum.

Back home, we are introducing National Citizen Service – a two-month programme for sixteen year-olds from different backgrounds to live and work together.

I also believe we should encourage meaningful and active participation in society, by shifting the balance of power, away from the state and to people.

That way common purpose can be formed, as people come together and work together in their neighbourhoods.

It will also help build stronger pride in local identity so people feel free to say yes, I am a Muslim, I am a Hindu, I am Christian but I am also a Londonder or a Berliner, too.

It's that identity – that feeling of belonging in our countries that is the key to achieving true cohesion.

Conclusion

Let me end with this. This terrorism is completely indiscriminate and has been thrust upon us.

It can't be ignored or contained.

We need to confront it with confidence.

Confront the ideology that drives it by defeating the ideas that warp so many minds at their root.

And confront the issues of identity that sustain it by standing for a much broader and generous vision of citizenship in our countries.

None of this will be easy. We need stamina, patience and endurance. And it won't happen at all if we act alone.

This ideology crosses continents – we are all in this together.

At stake are not just lives, it's our way of life.

That's why this is a challenge we cannot avoid – and one we must meet.