Surveillance specialists and bomb-disposal experts are part of the 24-hour unit. The Times of London says the shooting and subsequent death of Jean Charles de Menezes, a Brazilian electrician mistaken for a fleeing terrorist bomber in July 2005, underscores the value of military expertise in terrorist conflicts.
The SAS unit functions with the Hereford based regiment of the military. Hereford is the main headquarters for the SAS counter-terrorist squadron.
The exact location of the new unit is being withheld.
The MI5 spy agency has also set up a special headquarters in London for surveillance experts to gain better access to the North and the Midlands, the newspaper said.