Millions of pounds have been wasted on overseas anti-extremism projects which have failed to produce any security benefits to the UK, the Government is to admit.
Home Secretary Theresa May will concede that money from the £63 million-a-year anti-extremism budget has been given to groups which promote hardline beliefs.
Mrs May will promise to spend more on identifying threats in prisons, universities and the health service as she outlines the Government's revised Prevent strategy, which was originally launched in 2007 to stop the growth of home-grown terrorism.
A final draft of the document seen by The Times says the Government will ensure no more cash will be given "to organisations that hold extremist views or support terrorist-related activity of any kind".
The document adds that scrutiny of spending has been so poor it is "possible that Prevent funding has reached extremist groups of which we are not yet aware".
The new strategy will also say a renewed focus on the use of the internet is needed as the Government considers a "national blocking list" of violent and unlawful websites.
Plans will be unveiled to prevent computers in schools, libraries and colleges from accessing unlawful material on the internet.
Mrs May has criticised universities for their "complacency" in tackling Islamic extremism on campus, saying that for too long they have not been sufficiently willing to recognise what is happening.
"We want to explore the potential for violent and unlawful URL lists to be voluntarily incorporated into independent national blocking lists," the new strategy will say. "Internet filtering across the public estate is essential."
The Counter Terrorism Internet Referral Unit (CTIRU), which was set up last year to assess and remove internet-based content which may be illegal under UK law, removed material from the internet on 156 occasions over the last 15 months. But much more needs to be done, the strategy will say.