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Any assets held in Britain by the group which kidnapped and murdered British engineer Ken Bigley are to be frozen.
Chancellor Gordon Brown told the Bank of England to give the order to all financial institutions on Thursday.
Mr Brown told MPs: "We must do all in our power to ensure there is no hiding place for terrorists and no hiding place for those who finance terrorism."
It is not known whether the Tawhid and Jihad group, led by Jordanian militant Abu-Musab al-Zarqawi, have UK funds.
The group last Friday admitted killing Mr Bigley, who was held hostage for three weeks.
BBC Read More
Chancellor Gordon Brown told the Bank of England to give the order to all financial institutions on Thursday.
Mr Brown told MPs: "We must do all in our power to ensure there is no hiding place for terrorists and no hiding place for those who finance terrorism."
It is not known whether the Tawhid and Jihad group, led by Jordanian militant Abu-Musab al-Zarqawi, have UK funds.
The group last Friday admitted killing Mr Bigley, who was held hostage for three weeks.
BBC Read More
