The former elite soldiers are set to patrol beaches as well as hotel grounds disguised as tourists in a bid to protect British sun seekers as they holiday in the Iberian country.
Intelligence reports have indicated ISIS could be planning a repeat of the 2015 attack in Tunisia when 30 British holidaymakers were gunned down on a beach in north Africa.
Areas of mainland Spain as well as the Canary Islands and the Balearic islands, which includes popular Ibiza, are said to be at risk.
British holidaymakers enjoy the sun and sea in Spain
A team of more than 100 former troops are said to be experts in covert surveillance have been hired by tour operators to mingle among holidaymakers as tourists enjoying the sun but will be watching out for a possible attack.
A security source said: “Spain has been singled out as a target by the jihadis, it is wide open to an attack now that security in the UK has been tightened.
“This is a very secretive mission because tour operators don’t want to spread panic and reduce their business.”
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“You don’t get a softer target than British tourists lying in the sun.”
A leading British private security company was approached by tour operators who wanted to hire teams of surveillance experts.
The security teams, who are watching major hotels and beaches, have been given strict rules of engagement.
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A source said: “They must not intervene themselves. Instead they will be given points of contact in the Spanish police to report their findings to. Local police officers will make arrests.
“The security teams won’t be armed either but they will be equipped with hidden cameras to record suspects. Using footage it might be possible to identify terrorists using facial recognition technology.”
A Foreign Office spokesperson said: “This is a decision for tour operators and hotel chains if they feel the need to improve their security. Terrorists are likely to try to carry out attacks in Spain.”
Tour operators are said to have hired ex-SAS forces to patrol tourist hotspots in Spain
It is not clear which tour operators are behind the operation – Thomas Cook and Thomson have both said they were not aware of the move.
Spain is seen as a prime target this summer which attracts around 12 million British tourists a year, according to security experts.
Anthony Glees, Professor of security and intelligence at Buckinghamshire University, told the Daily Star Online: “Spain is very vulnerable because the weather is lovely there, the sea is warm and the vino cheap.
A British couple soak up the sun on holiday in Spain
“It's a magnet for tourists from all of Europe. So it's a magnet for those who wish to harm them.”
Mr Glees said the al-Qaeda threat “still exists” in Spain and needs to be dealt with.
He said: “I have no doubt at all that the al-Qaida threat still exists.
“Whether it's al-Qaeda controlled by networks spread around the Islamic world or whether it's ISIS run by Baghdadi in Raqqa, it a highly dangerous organisation that we have to take out.
“It's highly dangerous because it will strike to kill us wherever we are in Europe.”
Al-Qaeda are not the only terror group threatening to murder innocent people in Spain with ISIS claiming in 2016 that: “We will recover our land from the invaders.”