Another thought: liberty and counter-terrorism

It has been argued in the past that in order to defeat terrorism a nation has to gather information about the intents of its enemies, both domestic and foreign. In the wake of the atrocious 9-11 attacks on the United States, the horrific attacks in Madrid on March-11 2004, and the terrorist attacks on London's tube on July 7, 2005, it seems that governments are bent towards the use of more invasive measures to generate information. However, while their intent is undeniably good, it seems that they (and us) have forgotten to stop and think: isn't it just what the terrorists want? To undermine and perhaps even shutter the foundations of Western Civilizations, namely: human rights and liberties.
Here in the United States there is a growing debate regarding the measures used to investigate terrorists and those suspected of being terrorists. President Obama has repeatedly said in his campaign that he will either accuse or release the prisoners held at Guantanamo Bay, but will not keep them in custody without end. The issue is not that simple, though. For example what do you do with someone who you know is a terrorist, but you cannot disclose your sources. Should you risk the life of your source, hence risk the chance of getting new information about terrorist organizations? Or is it better to let this obvious danger be loose.
In the United Kingdom this debate has intensified over the endless measures taken by the British government to collect data over the subjects of the union. One must remember that in the UK, as well as in the USA, there are no "itentity cards". This comes from a history of long tradition, where every citizen (or subject) of the state shall not limit his or her liberties due to the use of identity cards. However, the UK is now approaching a state that monitors every subject including all his or her phone calls, cellular location, emails and messages. For the average Briton this is as radical a move as it would be for an Islamist terrorist to repent his deeds and become Catholic Christian. Unsurprisingly, this was too much not just for the ordinary person on the street, but also for one of the most prestigious counter-terrorism agents in the world, Dame Stella Rimington, the former Director General of the British MI5. The Dame has said in an interview for a Spanish journal that the measures taken and proposed by the government are too much, or in her words: "It would be better that the Government recognised that there are risks, rather than frightening people in order to be able to pass laws which restrict civil liberties, precisely one of the objects of terrorism: that we live in fear and under a police state". Naturally, the Home Office in Great Britain has come up with a response saying that she is "Wrong to suggest that had all the things we planned been passed we'd have been a police state, and wrong to suggest we have somehow stumbled towards a police state."
Again, there is no solution to the problem I state. However, one must always check and see whether the measures taken on behalf of society in order to counter terrorism are not somehow undermining the most important foundations of that same society. I think that some signs of fear over this dangerous trend towards a modern police-state already start to show.