MI5 is short for Military Intelligence section 5, a British Security Agency. It is also a counter intelligence Agency.
Established since 1909, it is charged with the responsibility of fighting terrorism, militancy, espionage and severe criminal activity within the boundaries of UK. MI5 is responsible for protection of British economic interests and parliamentary democracy.
MI5 is only concerned with Britains internal security. MI6 is responsible for Britains external security concerns.
MI5 gathers intelligence from its sources, assesses this information and acts accordingly to counter any threat. The agency assists the government and relevant parties in various security issues concerning U.K.
All security agencies including MI5 receive their budget from the Single Intelligence Account (SIA). The actions of MI5 are subject to scrutiny and validation from the parliament and the Home Secretary. However, MI5 is not a part of the Home Office. The requirements for MI5 and all its priorities are set by the National Intelligence Machinery.