The measure faces strong opposition in parliament from the opposition Conservatives and Liberal Democrats as well as rebel lawmakers from the ruling Labour party.
"We task the police and the security agencies with protecting us. Frankly, if they say to me it's getting more difficult and we need more time to investigate thoroughly, it is my duty to provide them with the tools they need," Smith said.
"We can't wait for an attack to succeed and then rush in new powers. We have got to stay ahead.
In 2005, four British suicide bombers killed 52 people on underground trains and a bus in London.
Other attacks have been foiled by police. Eight men are currently on trial in London accused of trying to blow up transatlantic jets using liquid explosives in 2006.
"Since the beginning of 2007, there have been 57 people convicted on terrorist plots," Smith said.