David Cameron has warned that the UK could begin military action against Islamic State (IS) militants in Iraq.

In a statement to Parliament yesterday, Cameron was asked if the government is "open to the idea of direct military participation in airstrikes".

The PM said: "I don't rule anything out. I don't think we should. We should consider everything."

He compared the Iraqi crisis to Libya in 2011, when British airstrikes were launched against Colonel Gaddafi.

"If there was a direct threat to British national interest, or indeed, as in the case with Libya when we had to act very, very rapidly to prevent a human catastrophe, the British Government must reserve the right to act immediately and to inform the House of Commons afterwards," Cameron said.

He also promised to introduce stricter anti-terror laws, such as giving police power to confiscate passports, and announced plans to block suspected British terrorists from returning to the UK.

This will address the "gap in the armoury," the PM added, noting that Britain is an "open, free and tolerant" nation, but "we have all been shocked and sickened by the barbarism we have witnessed in Iraq this summer".

"We should be clear about the root cause of this threat: a poisonous ideology of Islamist extremism that believes in using the most brutal forms of terrorism to force people to accept a warped world view and to live in a medieval state," Cameron declared.

"We should be clear this is nothing to do with Islam, which is a religion peacefully observed and devoutly observed by over a billion people and one that inspires countless acts of kindness every day."

He also said that "Adhering to British values is not an option or a choice...We will stand up for our values. We will in the end defeat this extremism."

Cameron will this week meet with US President Barack Obama and a number of other world leaders at the Nato summit in Wales.

It will "provide an opportunity for us to review the effectiveness of the international response so far and discuss what more we should do to help the region overcome the Isil threat," Cameron told the Commons.

The PM's words have been followed by a plea from former Bishop of Rochester, Rt Rev Michael Nazir-Ali, not to bow to pressures from Islamic extremism.

Referring to Archbishop John Sentamu's recent warning that Iraq could become another Rwanda, Bishop Nazir-Ali advocates for a "more generous asylum policy" for minorities suffering under the Islamic State, but adds that this is "only one step that must be taken."

"It is true that some refugees will not be able to return to their homes and must be sheltered in neighbouring countries and further afield, but this must not result in precisely the sort of "cleansing" Isil wants," Nazir-Ali writes in a letter to the Telegraph.

"If that is the only plan that we have up our sleeve it is simply fulfilling what the Islamic State wants...Syria and Iraq have been places where there has been this ancient diversity of communities and this is exactly what Isil wants to destroy," he said.