* Says learned lessons of Air India bomb case mistakes
* Promises more intelligence agency, police cooperation
* Says legal hurdles to information-sharing remain
By Allan Dowd
VANCOUVER, Dec 7 (Reuters) - Canada vowed on Tuesday stepped-up cooperation between police and intelligence services to combat terrorism, saying it has learned from its failure to catch the bombers involved in the 1985 Air India disaster.
The plan echoes many of the recommendations of an official inquiry that found a "cascading series of errors" in Canada's investigation into the 1985 bombing of Air India Flight 182 over the Atlantic Ocean -- en route from Montreal to India via London -- which killed 329 people and remains history's deadliest bombing of a airliner.
"The threat of terrorism is real, persistent and evolving... It is not too late to learn from the atrocity that was Air India," Public Safety Minister Vic Toews told reporters in Ottawa.
The new plan, some of which had already been unveiled, includes improved intelligence-sharing among police, the government's spy service -- the Canadian Security Intelligence Service -- and government finance officials.
The Air India inquiry found that police and intelligence officials failed to share evidence that could have stopped the attack before it happened, and that infighting hampered efforts to catch and prosecute those involved in the plot.
Despite one of the most intensive investigations in Canadian history, only one person was ever convicted in connection with the bombing, and the Canadian government apologized this year to the victims' families.
Toews acknowledged the government is still wrestling with thorny legal and privacy questions concerning how information collected for national security purposes can also be used as evidence in criminal cases against accused terrorists.
"Intelligence is collected for very different purposes and is collected differently than evidence for a criminal trial," Toews, a former prosecutor, told reporters.
A special commission will investigate those questions
The bomb that destroyed Air India Flight 182 is believed to have been the work of Sikh activists based in Western Canada who wanted an independent homeland in India.
The victims' families have long called on the government to crack down on organizations based in Canada that help raise money and provide other support for militant activities in other countries.
The government said while it has already toughened Canada's money-laundering laws, it wants to make it easier for finance and tax officials share information about suspect charities with police and intelligence officials. (Reporting Allan Dowd, editing by Peter Galloway)
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