Under part II of the Terrorism Act 2000 the Secretary of State may proscribe an organisation if he believes it to be concerned in terrorism. That is if it commits or participates in terrorist acts or if it prepares, promotes or encourages terrorism or is otherwise concerned in terrorism. The Terrorism Act 2006 added glorification of the commission or preparation of acts of terrorism to these criteria.
If these criteria are reached there are other factors which the Secretary of State can take into account when deciding which groups should be added to the Schedule two list. These include the nature and scale of an organisation's activities, the specific threat that it poses to the UK or to British nationals and interests overseas, the extent of the organisation's presence in the UK and the need to support other members of the international community in the global fight against terrorism.
The Secretary of State receives advice from a number of sources when making a decision including from a working group chaired by the Home Office and comprising representatives from the FCO, security and intelligence agencies, police, Cabinet Office and HM Treasury.