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U.S. President Barack Obama has abandoned plans to bring Khalid Sheik Mohammed – the self-proclaimed mastermind of the 9/11 attacks – from Guantanamo to Manhattan for a criminal trial close to where the World Trade Center's twin towers collapsed.

Facing a revolt from New Yorkers and a congressional threat to withhold the hundreds of millions of dollars needed for security for the trial, Mr. Obama has bowed to the inevitable and is now expected to hold the trial elsewhere, likely at a military base.

“I think I can acknowledge the obvious,” an administration official said. “We're considering other options.”

The turnaround is the third setback in less than a month for Mr. Obama's efforts to distance himself from his predecessor George W. Bush's approach to the “war on terror.”

The President has already missed his self-imposed deadline for closing Guantanamo and has faced an uproar over the decision to treat the Nigerian who attempted to blow up a U.S. jetliner on Christmas Day as a common criminal rather than an enemy combatant. His critics have scored political points portraying Mr. Obama as soft on terrorism.

“In dealing with terrorists, our tax dollars should pay for weapons to stop them, not lawyers to defend them,” said Scott Brown, the Republican whose election as a senator from Massachusetts, perhaps the country's most left-leaning state, was a blow for Mr. Obama's Democrats.

But it's not just the President's political opponents who have railed against Attorney General Eric Holder's decision to move the trial of the biggest al-Qaeda leaders held at Guantanamo to federal court.

New York Mayor Michael Bloomberg, who originally backed the decision, now says the trial could cost New Yorkers $200-million and he wants it moved. The trial might take years and “would be phenomenally expensive and it is very disruptive,” Mr. Bloomberg said.

More ominously for Mr. Obama, California Senator Dianne Feinstein, a powerful Democrat who chairs the Senate intelligence committee, released a letter she sent the President urging that the trial be moved to “a less prominent, less costly, and equally secure location.”

Ms. Feinstein, who is privy to highly classified material, suggested that the Christmas Day plot might have been the first of a series. And while a terrorist attack on the federal courthouse in downtown Manhattan might seem far-fetched, al-Qaeda is known for spectacular attacks.

“Trying Khalid Sheik Mohammed in New York City presents an avoidable danger, very large costs, and undue burdens on the city,” Ms. Feinstein said.

Mr. Mohammed, captured by CIA agents and Pakistani police in March, 2003, is currently held at Guantanamo Bay, along with roughly 200 other terrorist suspects.

Many Republicans still want foreign terrorist suspects tried by military tribunals – the plan for Canadian Omar Khadr – rather than shifted to civilian courts where they have the same rights as U.S. citizens.

The White House has apparently ordered up a list of alternative sites, including Governor's Island, a former U.S. military base in New York harbour where revolutionary and Civil War spies were hanged, and West Point, the elite military academy north of the city. Although the trial would remain civilian, moving it to a military base would save money on security.

Mr. Holder has said he decided to move the trials of those accused of plotting the Sept. 11 attacks to demonstrate the fairness of the American system, even when dealing with the emotionally charged issue of terrorism. The decision was nevertheless widely regarded as an attempt by Mr. Obama to distance himself from the Bush administration that created the controversial military tribunals.

The trials of accused terrorists “belong in a military installation – Guantanamo would be an ideal location,” said Peter King, a Republican Congressman from New York. “There is no community in the country that should have this foisted upon them.”