Households are being forced to pay a so-called "terrorism premium" on their home insurance by a company managing hundreds of flats.
Freehold Managers Plc has notified leaseholders of Warner flats in Waltham Foresst that they must pay an extra £68 due to the foiled plot in 2006 to blow up transatlantic airlines.
Three men from the borough were arrested and subsequently convicted of the terrorist offences, but five years later residents are seeing their bills rocket as a result.
As a condition of the freehold on the properties leaseholders must take out specific insurance with the company, leaving them with no choice but to pay up.
Walthamstow MP Stella Creasy said she was furious when her constituents informed her of the move, describing it as “extremely offensive”.
In an email sent to a concerned resident which has been seen by the Guardian, Helen Rosentreder, of the company’s insurance department, said: “In this day and age it is prudent for the landlord to cover any insured peril relevant to their portfolio.
“The Leasehold Valuation Tribunal in the past have confirmed that it is reasonable to include terrorism.
“This could not be deemed as miss-selling insurance.”
And referring to a report covering the terrorism case, she added: “Please find attached a newspaper article showing that terrorist activity has in the past been present in Walthamstow.”
In a letter to Emma Power, of Freehold Managers, Ms Creasy wrote: “The suggestion that the likelihood of further terrorism activities occurring in Walthamstow is such that additional premiums for buildings insurance are required is extremely offensive and unmerited.
“I believe this is both an unacceptable sleight on our local community and not an adequate basis on which to apply an additional cost to leaseholders.”
Ms Creasy has also writtten to the Residential Property Tribunal Service calling for it to act on the issue.
Later she added: “To exploit the sensitive and serious issue of terrorism in this way is insulting to our community and an inadequate reason for adding an extra £68 on to their fees.
“ I have asked the company to apologise to Walthamstow, and the Residential Property Valuation Tribunal to investigate if this charge can be overturned given the unfounded accusation on which it is based.
Residents affected by this who want to join in any attempt to challenge this should get in touch or join the Warner Action Group.”
Abdullah Ahmed Ali,27, Arafat Khan, 29, and Waheed Zaman, 26, of Walthamstow, and Tanvir Hussain, of Leyton, were convicted of terrorism offences after being arrested in 2006.